Narrative vs Fundamentals: Near-term disruption, long-term stability
Onkar pointed to shifting global supply chains and geopolitical disruptions impacting near-term earnings visibility.
“The biggest narrative right now is that growth expectations of companies can come true over the longer term. But there is supply chain disruption due to the war, especially for industries dependent on imported commodities. We are seeing tighter supply chains compared to before the war. In the next couple of quarters, this may reflect in earnings and cash flows. However, structurally, financial services and technology services remain on a good trajectory. Disruption in tech will be gradual, and while prices have corrected on near-term concerns, long-term trends remain intact.”
Cash positioning: Liquidity as an opportunity poolOn cash holdings, Onkar clarified that elevated levels reflect both inflows and active portfolio rebalancing.
“We are at 19% cash in the flexicap fund. We have been deploying capital, but cash also comes from inflows, profit booking, and dividends. We have added some stocks that look reasonably priced, but overall valuations remain stretched in many sectors.”Portfolio positioning: Diversified across sectors and geographiesOnkar highlighted a balanced allocation across domestic and global equities.“We are about 8% in IT, 6% in autos, and 20% in private sector banks. PSU exposure is around 6–7%, and about 11% is in global stocks like Google, Meta, Amazon, and Microsoft. Cash helps us stay patient while earning money market returns.”
IT services: Structural continuity amid AI disruption fearsOn IT services, Onkar emphasized long-term continuity despite AI-related concerns.
“IT services has been in the portfolio for a long time. Over 20 years, these companies have helped clients adopt new technologies. AI disruption is not binary. Change is happening, but gradually. Clients and IT firms will both adapt, and business models will evolve over time, not abruptly.”
Banking sector: Cyclicality with structural gainersOn banking, he noted cyclical pressures but strong structural advantages.
“Banking profitability is cyclical. Private banks benefit from technology, distribution scale, and fee income through AMC, insurance, and capital markets. There is a clear shift in market share, and top private banks have strong execution. The cycle is weak now, but long-term trends remain intact.”
Power sector: Long runway driven by structural demandOn power, Onkar remained positive on long-term demand drivers. “Power demand is rising from GDP growth, data centres, and EV adoption. India is expanding both renewable and thermal capacity. Transmission infrastructure has scaled significantly. Demand continues to exceed capacity, so the long runway theme remains intact, though the energy transition will be gradual.”
IEX: Regulatory overhang keeps outlook uncertainOn IEX, he maintained a cautious stance due to regulatory uncertainty. “Exchanges have strong network effects, but regulation can change dynamics. The key question is whether parallel infrastructure will scale. Until clarity emerges, it is difficult to take a strong view. So far, volumes and platform dominance remain intact.”
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