loading
loading
Expert view: Achin Goel, CFA, CIO and Fund Manager at Bonanza Portfolio, sees selective value in this market. He finds stock-specific opportunities in sectors such as precision engineering, defence and aerospace manufacturing, power transmission, electronics manufacturing, and data-centre infrastructure. In an interview with Mint, Goel shared his views on the biggest market headwinds and suggested an equity investment strategy. Edited excerpts: Value is emerging, but selectively. After a period of weak headline index performance, the market is rewarding earnings visibility, balance-sheet strength, and, more importantly, execution rather than broad-based beta. I would avoid anchoring to a single “normal” market P/E; the scope for re-rating will depend on how crude oil, geopolitics, global rates, trade-related uncertainty and corporate earnings evolve. At the sector level, we are currently focusing on pharma, precision engineering, select defence, and within financials, select PSU banks and well-capitalised mid-sized private banks. There are opportunities, but they are more thematic and stock-specific than index-wide. We see structural potential in precision engineering, defence and aerospace manufacturing, power transmission and electrical equipment, electronics manufacturing and data-centre infrastructure. The common thread is a multi-year demand runway supported by localisation, import substitution, capacity expansion and rising export participation. However, valuations in several pockets already discount a fair amount of growth, so the focus should remain on order-book quality, return on capital, cash-flow conversion and execution rather than momentum alone. A blanket reduction in equity exposure is not warranted simply because macro risks have risen. The recent turn in the global rate cycle, elevated crude prices, and continuing West Asian tensions do raise concerns and the required margin of safety, particularly for expensive businesses with weak earnings visibility. Our current approach is to stay invested in sectors showing strong resilience and rebalance in sectors where valuations have become excessive. At this stage, portfolio discipline, primarily, risk mitigation strategy matters more than making an all-or-nothing market call. Strong economic growth does not necessarily translate into index performance because markets discount future earnings, liquidity and the cost of capital rather than current GDP alone. India’s Q1 FY27 real GDP growth remained robust, but equities are simultaneously absorbing the impact of foreign institutional selling, crude oil above the comfort zone, rupee weakness, higher global bond yields and renewed US monetary tightening. There is also a sharp divergence within the market: mid- and small-cap companies exposed to higher-growth themes have held up better than several large index heavyweights. The key headwinds, therefore, are external liquidity, energy prices, currency pressure and geopolitics—not a deterioration in India’s underlying domestic growth story At this juncture, with the Nifty trading at 19.5 times trailing earnings, one should keep large caps as the core of the portfolio because they offer better liquidity, stronger balance sheets, and relatively greater valuation comfort after the correction. However, broad-based index buying is not recommended. Mid-caps can still deliver superior earnings growth, but selection has to be much more bottom-up and valuation-sensitive. In small caps, position sizing and liquidity discipline become critical because the dispersion between winners and losers can be significant. The strategy should therefore be less about making a blanket large-cap versus mid-cap versus small-cap call, and more about owning businesses where earnings growth, cash flows and return ratios justify the price being paid Fund switching and rebalancing should be used to manage portfolio risk, not to chase recent performance. Rebalancing is simply the process of restoring the portfolio to its intended asset allocation after market movements change the weights. A fund switch should be considered only when the original investment thesis has weakened—for example, persistent underperformance relative to the mandate and benchmark, a material change in investment process or fund management, sustained deterioration in risk-adjusted returns, or an unsuitable change in portfolio concentration or cost. The objective is disciplined portfolio maintenance, not frequent activity. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
document fetched 2026-10-01 03:04 · canonical https://livemint.com/market/stock-market-news/expert-view-bonanza-portfolio-cio-on-equity-investment-strategy-top-sectors-to-bet-on-and-more-11790764122693.html