360 ONE Phoenix PMS: Long Term Equity Growth

Current market context

The equity market is in a consolidation phase after the Government's GST reform and Fed Rate cut helped stocks to counter the tariff headwinds. Market has rebounded on hopes of a trade deal between India and the US. Relative P/B of large caps suggests stretched small & mid-cap valuations. (See charts below)

Source: Bloomberg, 360 ONE Asset Research. Median 5-year CAGR data from 2^nd January 2000 to 31^st August 2025.

With India underperforming in the emerging markets pack, foreign institutional investors sell off has continued unabated for the last 3 months. However, Inflation has eased considerably and is expected to remain contained in the near future.

The RBI has significantly eased financial conditions, marking a clear shift towards focusing on growth. The RBI is likely to keep liquidity conditions in surplus to ensure swift transmission of repo rate cuts to credit and deposit markets to boost economic growth. (See charts below)

Source: RBI, 360 ONE Asset Research

• GDP growth potential by 2033: India's GDP growth recovered to 7.4% YoY in March 2025, driven by a strong capex push by the government in the March quarter. (see figure) S&P Global recently updated their GDP growth forecast for India to 6.5% for FY2025-26. As per the IMF projections given in its World Economic Outlook database for September 2024, India will overtake Japan to become the third largest economy by 2033.
  
  

  

  Source: MOSPI 360 ONE Asset Research

In these market conditions, investors need to have a disciplined approach and focus on asset allocation. In this article we will discuss how the 360 ONE Phoenix PMS can help investors to create a portfolio dedicated to your long-term investment goals.

About the 360 ONE Phoenix PMS

Businesses go through cycles of upswings and downswings. 360 ONE Phoenix PMS identifies companies that are going through a short-term cycle of relatively low earnings growth and are about to turnaround i.e. see a sharp improvement in fundamentals in the future. Short term downturns or disruptions can provide excellent investment opportunities for long term investors.

Stages of turnaround

Triggers of turnaround

How can you benefit?

Identification of turnaround opportunities enable you to invest in companies trading at relatively deep discount to their future fundamental valuation: -

• Improved fundamentals usually unlock value in the businesses


• Valuation re-rating & value sustenance


• After a successful turnaround, sustenance of turnaround factors may further lead to compounding of value, creating new highs for the business and wealth creation for investors

Investment Process and Stock Selection Criteria

• Upgrade in quadrant (SCDV) i.e. higher PAT or EPS growth
  
  

  



• Lower profitability versus historical trends


• Proven track record and capital efficiency (ROE > 15%), refer to chart above


• Trading at a discount to historical valuations


• Changes in management / ownership


• Strong governance


• Stocks where price correction has occurred

360 ONE Phoenix PMS – Current portfolio positioning

Source: 360 One AMC. Data as on 30^th Sep 2025

Source: 360 One AMC. Data as on 30^th Sep 2025

360 ONE Phoenix PMS – Performance

The scheme has beaten BSE 500 TRI over different performance periods since inception. ( See the chart below)

Source: 360 ONE MF Data as on 30^th September 2025

Our Take:

• We expect key shifts in market trends:


• Growth leadership is shifting from government capital expenditures to consumer discretionary spending.


• After an outperformance of around three years, Value may take a back seat, and Quality and growth factors may regain favour.


• Looking ahead, discretionary consumption is expected to rise, driven by budget stimulus for the urban middle class, followed by a pay commission-related boost next year. Additionally, liquidity easing, accompanied by rate cuts, would create a favourable premise for growth and quality to come back.


• Several high-growth areas have strong value-creation potential. Key segments include auto EV plays, manufacturing, and pharma CDMO. The power transmission, distribution, and renewable energy sectors also present significant opportunities.


• Quick commerce is an emerging sector expected to experience exponential growth over the next five years. Additionally, telecom and high-quality private banks remain attractive value segments.


• The fund managers have consistently maintained a more favourable stance towards inward-looking sectors driven by domestic fundamentals, rather than those reliant on external or global factors. They believe domestic oriented sectors offer greater resilience and stability amid global uncertainties.


• 360 ONE Phoenix PMS with its focus on turnaround opportunities / undervalued stocks can provide attractive investment opportunities for investors with long investment horizons


• 360 ONE Phoenix PMS has established track record of alpha creation and is strongly positioned to deliver alphas for investors in the long term.

Consult with your financial advisor or PMS distributor if you want to know more about 360 ONE Phoenix PMS.