Why Capitalmind's Deepak Shenoy remains bullish on India's growth story

Addressing the market performance in the recent past, Shenoy admitted that while the BSE Sensex is down 5% over a one-year period, a myopic vision doesn't really serve the purpose. “If you look at markets over a one-year horizon, roughly half the time returns are poor—single digits less than 10%. But extend that horizon to five years, and the odds improve dramatically. Only 29% of the time, five-year returns fell below 10%. The longer you stay invested, the more the probability of decent returns improves. In the short term, there will always be noise—what looks bad today could look very different a year later."

Make for India

Shenoy added that despite the global headwinds, several trends make him bullish about India’s prospects. In fact, in some cases, he sees these headwinds as opportunities. Rising protectionism and tariffs, he argued, are forcing India to rely more on itself—a shift that could accelerate domestic manufacturing and consumption. “We may not be able to make for the world as freely, but we have a massive domestic base that is only getting stronger. That means India will increasingly make for itself," he said.

He added that tariffs will accelerate the 'Make for India’ phase. “We may not be able to make for the world as freely because of rising trade barriers, but we have a massive domestic consumption base that is only getting stronger. That means India will increasingly make for itself and this will likely be in various industries," Shenoy said.

Demographic dividend

The other major driver of India’s economy, according to Shenoy, is the country’s changing demographic mix. With a median age of just 28 today, and expected to cross 30 by 2028, India is entering the phase where rising incomes typically translate into higher consumption and faster economic growth.

According to Shenoy, this can be a sweet spot for India as other countries entering this stage have seen a sustained period of prosperity. Japan crossed this stage in the late 1970s and saw more than a decade of rapid growth. The US did the same in the mid-1980s, and China followed in the early 2000s, each experiencing a surge in prosperity as more people entered their peak earning and spending years. As Indians move into their 30s, discretionary income rises and consumption patterns shift. “Two decades ago, no one imagined paying ₹400 for a cup of coffee. Today, it’s normal—and that premiumization trend will only accelerate as incomes rise," Shenoy said.

Women participation

Shenoy said that the improvement of women’s participation in the labour workforce can also be a big lever.

“If women's participation rises meaningfully, it could boost GDP (gross domestic product) by as much as 50% over just three to four years. This shift has many downstream effects. For instance, fewer than 10% of credit cards are issued to women today, and only about 25-30% of home loans have women borrowers. But as empowerment deepens, social norms will shift too. People may delay marriage or choose not to have children, partly because raising a family is complex and expensive, but also because women will have more freedom to make these choices," he pointed out.