Bazaar & Beyond: Market Narratives, Long-Term Investing & Building Conviction Podcast

Vivek Ananth:  Hello everyone, and welcome to another episode of Bazaar & Beyond.

Today, we have with us Rahul Veera, Fund Manager at Nippon Life India AIF Management. Rahul brings deep experience in capital markets, with a strong focus on bottom-up investing, blending value and growth, and using a forensic lens to identify long-term opportunities.

In this episode, we discuss how investors should think about market narratives, global uncertainty, earnings cycles, and why discipline and independent thinking matter more than ever.

Rahul, thank you for joining us.

Rahul Veera on His Journey into Investment Management

Vivek Ananth: Let’s begin with your journey. How did you get into investment management, and what shaped your approach to markets?

Rahul Veera: Since my post-graduation days, I have been very interested in markets. I have always been inclined towards numbers, and that naturally drew me towards investing.

Alongside my studies, I pursued capital market certifications and continued learning through different programmes. But over time, I realised that while courses help, real learning happens on the job.

That combination of continuous learning and practical experience helped shape my journey in investment management.

The Biggest Learning from Managing AIFs

Vivek Ananth: You have seen multiple market cycles. What is one key learning from managing portfolios over time?

Rahul Veera: One important learning is that two statements in markets are always in conflict.

One is that history repeats itself.
The other is that this time is different.

Every cycle comes with a different trigger. Whether it was the global financial crisis, India being labelled a fragile economy, demonetisation and GST, or Covid each phase had its own reason.

But the outcome is often similar. Markets correct, investors face drawdowns, and portfolios are tested.

So, while every crisis feels unique in the moment, the underlying behaviour of markets tends to repeat.

Market Narratives and the Cost of Euphoria

Vivek Ananth: We often see strong narratives driving investor behaviour. How should investors think about themes and avoid overpaying for them?

Rahul Veera: Themes are important, but they are only a starting point.

At the end of the day, investing comes back to fundamentals  balance sheets, cash flows, and valuations.

If investors get carried away by a narrative and ignore valuations, there can be a cost.

The right approach is to look at the combination of theme, business quality, and valuation before taking a decision.

Defence, Drones and Bottom-Up Thinking

Vivek Ananth: Defence has been a strong theme in recent years, especially with policy support and private sector participation. How should investors approach such opportunities?

Rahul Veera: Even within a strong theme, selection matters.

Take drones as an example. There are hundreds of companies in this space, but only a handful are truly integrated and building core capabilities.

So, the first step is to filter out companies that are only assembling products. Then evaluate factors like order visibility, government partnerships, balance sheet strength, and funding structure.

Ultimately, even within the right theme, returns depend on what you buy and at what valuation.

Filtering Noise in a Narrative-Heavy Market

Vivek Ananth: There is a lot of information and noise in today’s environment. How can investors build conviction in long-term ideas?

Rahul Veera: Equity investing is inherently long-term.

Between the time you invest and the time you achieve your goals, multiple narratives will emerge and fade.

So, the focus should be on time in the market, not reacting to every new theme.

To build conviction, investors should look at policy direction, management quality, balance sheets, and long-term growth visibility.

AI, Disruption and Changing Business Cycles

Vivek Ananth: We have seen rapid shifts in narratives, especially with AI. How should investors interpret such changes?

Rahul Veera: There is a well-known thought that in the short term, we tend to overestimate disruption, and in the long term, we underestimate it.

That applies to AI as well.

In the near term, businesses react quickly, and narratives keep shifting. But over a longer horizon, the real impact becomes visible through earnings and profitability.

So instead of reacting to every change, investors should focus on whether the underlying business fundamentals are improving.

Geopolitics, AI and Earnings Growth

Vivek Ananth: Today, global uncertainty and AI-led disruption are playing out together. How should investors interpret this environment?

Rahul Veera: Both factors are influencing markets at the same time.

Earnings expectations have moderated in the near term due to global developments. But whether this impact is temporary or sustained will depend on how long these disruptions continue.

Short-term volatility is inevitable, but the key is to assess whether the long-term earnings trajectory remains intact.

Setting Realistic Growth Expectations

Vivek Ananth: As India grows larger as an economy, should investors moderate their expectations?

Rahul Veera: Yes, expectations need to be realistic.

As the economy scales, extremely high growth rates become harder to sustain.

A steady growth trajectory, combined with strong return ratios, is a more practical expectation going forward.

Building Conviction as a Retail Investor

Vivek Ananth: Retail investors often struggle during volatile phases. How can they stay invested with conviction?

Rahul Veera: Patience and temperament are critical.

Markets will go through cycles, and investors need to stay invested through these phases.

Over long periods, despite multiple disruptions, markets have continued to grow.

So, for wealth creation, it is important to stay disciplined and focus on the long term.

India’s Structural Strengths

Vivek Ananth: Do you remain confident about India’s long-term growth story despite global uncertainties?

Rahul Veera: Yes, the long-term outlook remains positive.

India has favourable demographics, stable macroeconomic conditions, and strong return ratios across companies.

These factors support long-term earnings growth and compounding opportunities.

Balance Sheet Red Flags Investors Should Watch

Vivek Ananth: What should investors watch for when evaluating companies?

Rahul Veera: A few key indicators are important:

• Debt levels
• Cash flow quality
• Return ratios
• Promoter behaviour

These factors help assess the strength of a business across cycles.

Banking, Credit Growth and Liquidity

Vivek Ananth: How do you see the banking sector evolving?

Rahul Veera: The structure of credit growth has shifted over time, with retail lending becoming more prominent.

Liquidity measures by the central bank have supported the system, and overall credit growth remains stable.

This positions the banking sector reasonably well for the medium term.

Infrastructure, Capex and Policy Priorities

Vivek Ananth: Could fiscal pressures impact infrastructure spending?

Rahul Veera: Some reprioritisation may happen, but critical sectors like power and defence are likely to remain in focus.

These are essential for long-term economic stability.

One Mistake Investors Should Avoid

Vivek Ananth: What is one key mistake investors should avoid?

Rahul Veera: Ignoring balance sheet quality.

Strong businesses are built on strong financials, and that should always remain a priority.

Book Recommendation

Vivek Ananth: Any recommendations for our viewers?

Rahul Veera: I would recommend Financial Shenanigans.

It provides valuable insights into accounting practices and helps investors identify red flags.

Closing Thoughts

Vivek Ananth: Thank you so much, Rahul, for joining us and sharing your insights.

Rahul Veera: Thank you. It was a pleasure.

Vivek Ananth: And to our viewers, markets will continue to evolve with changing narratives and cycles. But disciplined investing, strong research, and a long-term approach remain constant.

Until next time, stay informed and invest wisely.

Disclaimer: Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.