Invesco MF's Aditya Khemani on Earnings, Valuations, and Growth

With small- and mid-cap valuations running hot, many investors are wondering: Will earnings growth keep pace, or are we heading for disappointment? In this episode, we sit down with Aditya Khemani, Fund Manager at Invesco Mutual Fund, who manages over ₹25,000 crore across large-, mid- and small-cap strategies. He shares candid insights on: Why earnings risk never disappears—but matters less over 3, 5, or 10 years. How India’s macro backdrop is one of the strongest in two decades, even as cyclical slowdowns remain inevitable. Why valuations must be judged through the lens of long-term growth and cash flows, not just near-term P/E ratios. The importance of stock selection vs sector bets in generating alpha. Why investors should temper return expectations to realistic low-teen outcomes. Key structural themes—from healthcare to financialisation—that continue to drive resilience in his funds. Khemani also explains why quality, growth, and cash flow conversion remain at the heart of his stock-picking framework, and how patient investors can still create meaningful wealth in India’s evolving markets. If you’ve been anxious about stretched valuations or confused about how to navigate today’s mid- and small-cap rally, this conversation will give you much-needed clarity.