Balasubramanian points to a clutch of genuinely positive developments — the resolution of US tariff uncertainty, progress on an EU Free Trade Agreement, and improving corporate earnings drivers — that have yet to be fully priced in. The missing ingredient, he argues, is sentiment, currently weighed down by AI disruption fears and global geopolitical noise. Once quarterly numbers begin reflecting underlying business strength, participation should follow.
“The best time to invest is actually when the moving positive parts are being ignored by the market”
“The best time to invest is actually when the moving positive parts are being ignored by the market”
The IT contra call
Perhaps the most pointed argument Balasubramanian makes is on Indian IT — a sector that has seen a sharp, painful de-rating driven by fears that artificial intelligence will hollow out traditional software services revenue. He disagrees with the market’s panic. Indian IT companies, he notes, have historically reinvented themselves through every major technology shift, and there is no reason to believe this cycle will be different.
ETMarkets.comABSL AMC is taking a selective contra position in larger IT names with strong management track records and clean balance sheets — companies he believes are actively building AI capabilities to capture the next wave of enterprise spending, not just defend their existing books.
Auto: Strength across the board
On the ground, one of the clearest signals of economic resilience is monthly auto sales data. Balasubramanian highlights that growth in two-wheelers, passenger vehicles, and tractors has continued well beyond a one-month GST-driven bump. The commercial vehicle segment — traditionally a proxy for industrial and freight activity — is also beginning to stir after a prolonged slump, making it a potential additional contra opportunity.
For investors looking to play the auto cycle, the key question is whether to buy OEMs directly or gain exposure through ancillaries and auto lenders. Balasubramanian indicates conviction remains strong on two-wheelers and passenger vehicles themselves, while flagging that EV disruption poses a structural risk to those not actively adapting their product lines.
The consumption wildcard: 8th Pay Commission
Balasubramanian acknowledges that consumption-oriented stocks have underdelivered despite supportive policy and a supportive macro backdrop. His thesis for a reversal: the 8th Pay Commission. When implemented, the government salary revision is expected to put meaningful discretionary income into the hands of a large salaried workforce, potentially acting as a structural demand catalyst that the market has not yet priced in.His overarching advice to investors cutting through the noise: favour flexicap and multicap funds over single-sector bets, supplement with multi-asset allocation funds for diversification across equity, fixed income, gold, and silver — and resist the temptation to time what may already be the bottom.