With Q4 earnings trickling in across sectors, market watchers are recalibrating their portfolios. Solanki spoke to ET Now to break down what the numbers mean and where patient capital should be deployed over the next one to three years.
Maruti beats back, but two-wheelers are the real auto play
Maruti’s Q4 headline numbers came in below street estimates, weighed down by margin pressure and rising input costs. Yet the stock bounced, and the broader auto pack traded with renewed energy. Solanki points to Maruti’s hybrid strategy as the key re-rating trigger — the company is well positioned to offer blended-fuel and hybrid choices as government policy tilts in that direction.
But his core auto conviction sits elsewhere. Within the sector, Anand Rathi is overweight on two-wheelers and commercial vehicles relative to passenger vehicles, where competition has intensified and buyer options have multiplied.
Banking: pick your spots, Bandhan needs more proof
On smaller banks, Solanki urges restraint with Bandhan Bank despite a strong quarter. Asset quality concerns from prior periods make one good result insufficient; he wants two to three more quarters of consistency before drawing conclusions.
“The continuity is more important than one off quarter. It would be prudent to wait for further quarterly results and see how asset quality improves”
For private banks, he favours a stock-specific approach. ICICI Bank and Axis Bank are the preferred names, with HDFC Bank flagged as a turnaround candidate given its historically attractive valuations. PSU banks, meanwhile, are expected to sustain returns above 1% ROA for at least two more quarters, even if their re-rating potential is now limited.
ICICI Bank
Preferred pick
Private sector
Axis Bank
Preferred pick
Private sector
HDFC Bank
Turnaround watch
Valuation entry
Bandhan Bank
Wait and watch
2–3 qtrs needed
Defence: don’t watch quarters, watch years
Solanki cautions investors against judging defence stocks on quarterly execution. The sector is inherently long-cycle, with peaks and troughs in both ordering and delivery. The right lens is a three-to-five year view, over which he sees revenues growing two to three times from current levels, driven by both domestic orders and a fast-growing export pipeline.
He singles out GRSE‘s move into commercial ship repair as a smart diversification that smooths revenue and reduces dependence on defence order timing alone.
Bajaj Finance and Reliance: The steadier bets
On Bajaj Finance, Solanki expects Q4 profitability to improve over the prior quarter, which was dragged by accelerated provisioning that is unlikely to repeat. He sees 22% loan growth and ROAs above 4% as sustainable, with interest rates on a stable path, though he flags inflation as an upside risk worth monitoring closely given ongoing supply chain pressures.
For Reliance, the O2C business faces continued pressure from West Asia crude volatility, but Jio and the consumer segment are providing a firm earnings floor. The anticipated Jio IPO remains a meaningful catalyst, and Solanki sees no immediate downside risk to the stock.