“In my view, tariffs getting settled with the US is a basic requirement. I do not think it is an extra booster for the market,” Vora told ET Now. “If we do not settle the tariff issue, then it is a negative for the market, but settling it is par for the course.”
He added that the market has already priced in the expectation of a deal. “I do not see a situation in which the trade situation with the US does not get resolved. It will get resolved, I do not know the timing, but the fact is that the US has settled with mostly all countries including China. India is one of the last countries to not have settled the whole issue, so sooner it happens, the better.”
Domestic Recovery and Portfolio Strategy
Vora believes investors should base their portfolios on a domestic cyclical recovery rather than external trade factors. “We should assume that things will be back to normal sooner rather than later. The second half will be better. Consumption is doing well, the government is stimulating investments, and the RBI is maintaining easy liquidity and favourable interest rates.”
He noted that both private and public investments are set to pick up pace, supporting the broader economic recovery.Time Correction Creating OpportunityAfter a year of muted market returns, valuations are now looking more attractive, Vora said. “A good 12 to 15 months of time correction is good. With time correction also comes valuation correction because we have about 10% earnings growth in the last one year. So, we have had time correction and valuation correction, and broader markets are showing good earnings resilience.”While the Nifty 50 has grown at a modest pace, Vora believes the real opportunity lies in mid- and small-cap stocks. “India’s story is not necessarily reflected in the top 50 stocks. Going down to midcaps and smallcaps, that’s where exciting stock picks are. Even if the markets deliver normal returns, stock-picking can create alpha.”
Key Sectors to WatchAccording to Vora, the near-term focus remains on domestic consumption and investment-led growth. “While the trade deal is required to ensure exports to the US are not disrupted, that has not been the main growth driver for India,” he said.
“In the immediate future, domestic consumption and private sector investment-led recovery will drive growth. Discretionary stocks, capital goods, and defence sectors look promising,” he noted, adding that the banking sector offers strong value after a prolonged period of underperformance.
“If GDP grows at 6.5-7%, credit growth has to be about 13-14%. So, banks—both private and public sector—offer very good value if growth comes back.”
He also highlighted emerging opportunities in new-age technology and platform-based businesses, calling them “bottom-up” plays that remain exciting.
China Plus One Strategy IntactAddressing concerns about the potential impact of a US-India trade deal on the China Plus One strategy, Vora was clear: “Absolutely not. The de-risking of the world economy away from China will continue, and India will remain a key player.”
He added, “India, in terms of protection, royalties, transparency, and rule of law, is far more open compared to China. The China Plus One theme is not going away; in fact, it will strengthen once the trade deal is done.”
Defence Stocks: A Long-Term PlayOn the defence sector, which has witnessed sharp rallies and recent cool-offs, Vora maintained a long-term view. “A lot of these stocks have gone through price and time correction over the past nine months. This is a long-term secular theme; quarterly numbers don’t matter much. Build a core portfolio of defence names you like and stick with it.”
Mihir Vora believes the expected resolution of the India-US tariff issue is essential but not a major upside trigger. He remains optimistic about India’s domestic recovery, sees opportunities in midcaps, banks, capital goods, and defence, and reaffirms faith in the China Plus One theme as India continues to strengthen its global manufacturing and investment appeal.
