Speaking to ET Now, Vora said the recent recovery in markets is not merely year-end optimism but reflects a broader confluence of supportive factors. “India is genuinely set up for a good constructive cycle. Growth remains strong in a low-inflation environment, while monetary and fiscal policies are supportive. From a quantitative perspective, risk appetite bottomed out around February and has been steadily improving since,” he said.
Earnings upgrade cycle underway
Vora pointed out that volatility remains low and the fear factor has eased, indicating healthier market conditions. Importantly, he noted that the earnings downgrade cycle appears to be behind India Inc., with an earnings upgrade cycle now underway. “Crude dynamics are favourable and India’s relative valuation versus other emerging markets, developed markets, and even assets like gold and silver, is near cyclical lows,” he added.
India looks attractive as global AI, crypto trades unwind
He also highlighted India’s positioning amid global shifts in investor preferences. “India did not participate in the AI and crypto rally. As that trade unwinds, India becomes a neutral and attractive allocation for global investors looking for stability and growth,” Vora said.
On foreign institutional investor (FII) flows, Vora cautioned that buying from overseas investors remains limited for now. However, he credited strong domestic participation for keeping markets resilient. “It is a matter of when, not if, foreign investors return. India’s macro stability, earnings outlook and domestic liquidity make it a compelling long-term story,” he said.
In the near term, Vora acknowledged risks such as the unwinding of the Japanese yen carry trade, a weakening rupee and delayed global trade deals. Over the longer term, the lack of a direct artificial intelligence play in India could also weigh on FII interest. “These are risks, but they are likely to resolve over time,” he noted.
Tilted towards largecaps, value-oriented portfolio
From a portfolio strategy perspective, Vora said PL Asset Management is currently tilted towards largecaps and midcaps, with smallcaps forming less than 15% of the portfolio. “Smallcaps have disappointed on earnings growth and valuations are not particularly cheap. We are more comfortable with largecaps and midcaps where growth visibility and valuation comfort are better,” he said.The firm’s portfolio is presently value-oriented, with a cyclical bias towards sectors such as financials, materials, metals, energy and commodities. “Our style orientation adapts to market cycles. Right now, value and cyclicals offer better risk-reward,” Vora said.
Overall, while near-term volatility cannot be ruled out, Vora believes the structural case for Indian equities remains intact, backed by macro stability, improving earnings momentum and supportive domestic liquidity.