Crises often create opportunities
Speaking to ET Now, Parekh said periods of uncertainty are not unusual in financial markets. Over the years, investors have faced disruptions ranging from the Greece crisis and Brexit to tariff wars and regional conflicts. Yet markets have eventually recovered once clarity emerged.
“You do not get great crisis and good news together. There is always uncertainty during such periods, but history shows solutions eventually emerge because the stakes are too high.”
He believes investors should focus less on predicting the exact bottom and more on building positions gradually.
“We are telling our clients to slowly and steadily start accumulating because valuations in many large Nifty names are very attractive and could look very good over the next one to three years.”
Selective buying within Nifty
Parekh said the current correction has created valuation comfort in several large-cap sectors, allowing investors to prioritise opportunities within the benchmark index.
“Nifty itself is becoming attractive now, but within the index you can prioritise sectors based on valuation comfort.”
Among the preferred sectors, financials and telecom remain key themes.
“We are very comfortable with financials and we like telecom. Even the largest integrated O2C conglomerate looks attractive now.”
He added that certain discretionary stocks could benefit strongly if macro conditions stabilise.
“If things settle down and crude eases to around $70–$75, companies like Maruti or Mahindra could be big beneficiaries.”
Parekh expects a sharp rebound once uncertainties begin to fade.
“When this settles down, the rise in Nifty could be meaningful — not just 2–3% but perhaps 5–7%.”
IT remains underweight
Despite the correction in technology stocks, Parekh said his portfolio continues to remain underweight on the IT sector.
“We have been underweight on IT for nearly four years and we do not want to go overweight right now.” While valuations have improved, he believes other sectors offer stronger rebound potential.
“There is value in IT and downside risks may be limited, but we prefer companies where the bounce back can be more meaningful.”
He also highlighted emerging structural challenges for the sector. “AI remains a long-term headwind and prolonged global disruptions could also affect decision-making for global IT companies.”
Domestic-focused strategy continues
Parekh said his broader investment strategy continues to favour companies linked to India’s domestic growth story rather than globally exposed sectors.
“Our thesis has been domestic overweight and global underweight for the last four years, and we continue to follow that approach.”
He believes domestic-facing businesses are better insulated from global volatility. “It is better to invest in companies that are more domestic-facing and less affected by global headwinds.”
Key sector bets
Within the domestic theme, Parekh highlighted several sectors where his portfolio continues to see opportunity. “We are positive on discretionary consumption, telecom, infrastructure and financials, especially large banks.”
He also sees potential in commodity-linked sectors. “We like cement and have large exposure to non-ferrous metals as well.”
Utilities and diversified natural resource businesses also feature in his strategy. “In non-ferrous we see lower vulnerability from China, and we also remain overweight on domestic utilities.”
A patient approach to volatility
For investors navigating current market swings, Parekh’s advice remains consistent — stay patient and accumulate quality stocks during corrections. While global uncertainties may persist in the near term, he believes strong domestic sectors and attractive valuations could set the stage for meaningful gains once stability returns.