ETBudget Boardroom | India is a stock picker’s paradise”: Navneet Munot on Markets and Budget 2026

As India heads into Budget 2026 amid persistent global uncertainty, Navneet Munot, MD & CEO of HDFC AMC, believes the country’s long-term growth story remains firmly intact.Emphasising policy continuity, sustained reforms and a steady capex push, Munot says India continues to offer rich bottom-up opportunities across sectors, making it a “stock picker’s paradise.”In an interaction with Kshitij Anand on the sidelines of ET Budget Boardroom held in Mumbai, he also shares his views on market valuations versus earnings, India’s positioning in the global AI cycle, and the key policy measures he expects from the upcoming Budget to deepen domestic participation and sustain earnings-led market growth. Edited Excerpts –Kshitij Anand: Now, Budget 2026 is coming at a time when there is a lot of global uncertainty around the corner. How will the Indian government turn this into a power shift? I think that is the first question I would like to put across. How do you see this?Navneet Munot: You mentioned a couple of points, and one of them was that this is the ninth consecutive Budget by the same Finance Minister, Ms Nirmala Sitharaman. Sincere compliments to our FM and to the government for ensuring continuity. You also mentioned that it is coming at a time of significant global uncertainty.The only thing I can say about global macro and global politics is that the continuity of uncertainty looks like it is going to be there for some time.At the same time, in India, we have continued to pedal hard on reforms, and the government has not waited for Budget Day to announce them. Whether it is GST simplification, labour codes, or several other reforms, many have already been announced. I am sure everyone is waiting for Budget Day to see the path towards fiscal consolidation, further capex programmes, and more measures to spur growth.Growth numbers have been pretty good when viewed in the context of the global environment, with India growing at over 8%. Having said that, I am sure the government will do whatever it takes to take growth to a higher level. I must compliment the government for another reason as well—apart from presenting the ninth consecutive Budget, this Budget is coming on a Sunday. It sends a message to 1.4 billion people that the government is working 24x7 for the nation. As the Prime Minister often says, sabka saath, sabka vikas, sabka vishwas, sabka prayas. The government is surely doing all the prayas, including working on a Sunday.I think it is a message to everyone that, despite global challenges, there are massive opportunities for all of us to do well.Kshitij Anand: Let me come to markets now. This is something we also want to discuss. In 2025, we hit record highs and momentum has continued. There are some headwinds in 2026, which is perfectly alright. However, earnings have not grown to the extent that PE multiple expansion has taken place. I am not saying the Budget will give any direct indication on this, but the steps taken in the Budget can certainly aid India Inc in improving earnings. What are your views?Navneet Munot: There are two ways to look at this. One is that this is the tenth consecutive year of positive returns for the Nifty. Smallcaps have underperformed, largely because they had outperformed earlier and required some valuation adjustment. Another way to look at it is that Indian markets have underperformed most other global markets.There has been a strong chase for anything related to AI, and there is a perception that India has been lagging behind. My view is that structurally, India will be a big beneficiary, and we will emerge as the use-case capital of the world when it comes to AI. This will create significant opportunities for corporate India over time—to enhance productivity, explore new avenues of growth, serve customers better, and expand markets.At some stage, when we see a correction in the global AI trade, I think India could benefit, as we may emerge as an AI hedge relative to some other markets. One heartening feature has been the continuous flow of domestic investments. Over the last five years, domestic institutional investors have invested close to $250 billion at a time when foreign investors have been net sellers. My request to the government would be to ensure that the faith and trust of domestic investors continue. Fiscal incentives for investing in long-term and risk assets should continue, and there should be more ways to monetise or channelise money locked in physical assets like land, gold, and silver into capital markets through fiscal incentives.As far as earnings are concerned, the government has been doing its bit. We have spoken about the continuing momentum on reforms, and if the government continues with capex while staying on the path of fiscal consolidation, and if the RBI continues to support growth through liquidity measures and interest rate cuts, all of this together will spur growth and ultimately lead to higher earnings.Kshitij Anand: Any sectors likely to benefit the most?Navneet Munot: We are bottom-up stock pickers, and I always say this—India is a stock picker’s paradise. You get opportunities across many segments and sectors in an economy of 1.4 billion consumers, starting from a very low base and continuing to grow over time.On the manufacturing side, over the last couple of years, the government has taken significant steps, ranging from a reduction in corporate tax and the PLI scheme to improvements in the overall logistics infrastructure, along with strong efforts towards indigenisation and procurement from Indian companies, and so on. I am sure these measures are going to show results.We have also seen the government working very hard on the energy transition, the EV transition, and promoting new-age manufacturing such as semiconductors, along with moves towards AI, etc. India will participate in many growth opportunities across sectors.Kshitij Anand: Your three expectations from the Budget.Navneet Munot: Trillions of dollars of household wealth are locked in gold, silver, and land. Every year, we import large quantities of gold and silver. If we can introduce something like Section 54F, where people are incentivised to sell these assets and deploy the proceeds into long-term equity, it would do a lot of good for the country.Second, if AI is going to change the nature of the labour market, then the Government of India should invest much more in PM Vishwakarma. Skills that involve both hand and mind will become far more valuable, and we need to restore the dignity and importance of such work.Third, there should be substantially higher investment in AI and R&D. India has a real chance of becoming a global leader in these areas.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)