On the market environment, Sonthalia said, “The conflict will widen first, then shift into a longer phase of economic adjustment and selective repair rather than broad recovery. This is no longer just a geopolitical event—it’s impacting oil prices, LNG, and supply chains, creating an inflation shock. India, being dependent on oil, will feel the impact, and recovery could take time, likely until FY28.”
Regarding buying opportunities, he added, “For foreign investors, returns in dollar terms are less attractive due to rupee depreciation. But for domestic investors, valuations have corrected to near COVID-era levels. Some sectors and companies now look attractive from a three- to four-year perspective. Domestic savings is replacing foreign flows, so one should focus on resilient stocks and valuations.”
When asked about sector preferences, Sonthalia noted, “Sectors benefiting from inflation, commodities, consumption with pricing power, defence, renewables, and hospitals look promising. Financials require selectivity—private banks are solid long-term, while PSU banks offer favourable valuations. Overall, pick and choose carefully, focusing on sectors with resilience.”
The market may be turbulent in the short term, but selective opportunities exist for disciplined investors with a longer-term horizon.
