With geopolitical tensions driving short-term volatility and liquidity dynamics shifting due to QIPs and block deals, Paras emphasizes a bottom-up approach to stock picking.
He highlights sectors such as financials, defence, pharmaceuticals, and specialty chemicals as particularly attractive in the current environment, backed by strong fundamentals and structural tailwinds.
From crude oil concerns to global interest rate trends, and from sectoral plays to long-term asset allocation strategies — we cover it all in this insightful conversation.
Tune in to hear where opportunities lie and how investors can navigate the months ahead with discipline and clarity. Edited Excerpts –
Q) We closed May on a high note but witnessed some volatility in June – is it geopolitical concerns weighing on sentiment?
A) Yes, the volatility we are seeing is because of the geopolitical tensions emerging in the middle east and crude spiking up creating jitters in the markets.
Q) As we are about to end 1H2025, what are your expectations or assumptions for the rest of the year?
A) The rest of the year will see the surge in supply of papers in the primary market and the plethora of QIP and promoter block deals absorbing liquidity and capping market upside.
Also, on the other hand there will be buoyancy in the market based on improved fundamentals because of interest rate cuts and ample supply of liquidity, normal monsoon boosting the economy and more specifically consumption.
Q) Are there any new or existing themes that are likely to do well in 2H2025?
A) Discretionary consumption is a theme which might gain momentum with lower interest rate and festive heavy second half.
Themes like clean water, convenience services, airlines, govt policy supportive industries, digital advertising, hotels, tours & travels, selective industrial products & services, cooling products, financialization of savings, hospitals etc., seem to be riding on structural tailwinds and opportunities can be tapped in these segments when the market turns volatile and the valuation starts looking compelling.
Q) Geopolitical concerns weighed on crude oil in the past few weeks. How do you see crude oil moving in the near future and what could be the possible impact on earnings and GDP growth?
A) Crude oil movement in the near future is more to do with war in the middle-east. But it may be short lived till the time tension between Israel and Iran is resolved.
How long the skirmish continues is a fluid situation to predict. But any sign of restoration of normalcy will see supplies easing and crude oil prices coming down.
Crude oil price spike has an impact on Indian GDP and current account balance, but the dependency has reduced a lot with the passage of time and with the adoption in alternate sources of energy.
Q) In terms of valuation comfort – which sectors are on your radar?
A) We are looking at companies more from bottoms-up and sectors like financials/NBFCs, capitals goods, pharma, discretionary consumption, defence, tours & travels, hospitality, hospitals, manufacturing/electronics, speciality chemicals are few sectors which look good.
Q) How are FIIs looking at India amid falling interest rates globally?
A) FII’s will certainly look at India positively given what is happening in the developed market. Increasingly the emerging market is becoming attractive with rising/elevated bond yields in the US and given other macro headwinds in developed markets. Though we are yet to see a surge in India dedicated foreign funds.
Q) If someone plans to allocate say Rs 10 lakh (30-40 years) in 2H2025 – should they put fresh money to work? What is the ideal asset allocation?
A) If anybody has a 30-40 years horizon of asset allocation, I think rather than timing the market, it is the discipline of uninterrupted SIP which will work wonders in compounding wealth. Equity as an asset class can be seriously looked at, because for such a long horizon, it will be for the younger generation in their twenties and having a risk appetite to digest volatility.
Q) How is the rate trajectory looking from the RBI? Do you think the front-loaded 50 bps cut was enough to boost consumption?
A) Yes, it seems rate cut is frontloaded and with the boost in liquidity it will support consumption.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
