“Start accumulating, worst is priced in”: Nischal Maheshwari on market strategy

At a time when markets are being tossed around by global uncertainty and geopolitical developments, market expert Nischal Maheshwari believes the current phase presents a meaningful opportunity for long-term investors. In a conversation with ET Now, he described the present environment as both “interesting” and volatile, but one where investors should begin accumulating stocks in a staggered manner.

He highlighted that this is the third consecutive April—2024, 2025, and now 2026—when markets are hovering around similar levels despite earnings growth of nearly 10–12% over the past two years. According to him, this divergence suggests that markets have already undergone a significant correction in terms of valuations, and much of the downside risk appears to be priced in. As a result, he sees every decline from here as a potential buying opportunity.

Maheshwari, however, cautioned that volatility is far from over. With geopolitical tensions capable of triggering sudden market swings, investors should not expect a smooth upward trajectory. Instead, he recommends a disciplined approach to investing—allocating capital in parts rather than all at once. For instance, deploying 10–15% of funds at current levels and adding more on further declines allows investors to navigate uncertainty without trying to perfectly time the market bottom. He also pointed out that valuations, currently at around 17–18 times FY27 earnings, appear reasonable, especially under his assumption that earnings growth could remain flat between FY26 and FY27 due to risks such as rising oil prices. Even with conservative estimates, he sees a fair value zone emerging that supports gradual accumulation.

On the sectoral front, Maheshwari expressed strong confidence in banking stocks, particularly private sector lenders. He noted that these stocks have underperformed over the past two years and are now trading at valuations not seen in four to five years, despite maintaining healthy earnings growth of 12–15%, strong capital positions, and stable asset quality. He attributed the weakness largely to selling pressure from foreign institutional investors (FIIs), who have been reducing exposure to Indian equities. This, he believes, has created an attractive entry point for domestic investors. Alongside banking, he also sees a short-term trading opportunity in the IT sector, where he expects a potential upside of 10–15% over the next three months, though he clearly emphasized that this is a tactical play rather than a long-term investment.

Discussing specific pockets of the market, Maheshwari maintained a positive stance on InterGlobe Aviation, calling current levels favourable for buying. In contrast, he advised caution on retail stocks, suggesting that while existing investors can continue to hold positions, fresh investments may be better directed toward sectors offering more attractive valuations. For those looking to play the consumption theme, he prefers the automobile sector, naming Mahindra & Mahindra as his top pick. At the same time, he urged investors to stay away from high-valuation stocks across the board, stressing that with several sectors now available at reasonable prices, there is little justification for chasing expensive names.

He also flagged certain areas where caution is warranted. In the pharma sector, he recommended a wait-and-watch approach due to potential disruptions from global developments, particularly the possibility of tariffs being discussed by former U.S. President Donald Trump. As for PSU banks, while he acknowledged that recent corrections have made them more attractive, he views them primarily as short-term trading opportunities rather than long-term investment bets, given that their valuations are now comparable to private sector peers.Overall, Maheshwari’s strategy reflects a balanced and pragmatic outlook. While he acknowledges that markets may continue to swing sharply in the near term, he believes the broader correction has already played out. His core message to investors is simple yet effective: avoid trying to predict the exact bottom, focus on fundamentally strong yet undervalued sectors like banking, participate selectively in tactical opportunities such as IT, and most importantly, build positions gradually. In a market defined by uncertainty, he suggests that consistency and discipline, rather than aggressive timing, will ultimately drive better outcomes.