From the sidelines to the market
Capitalmind was sitting at roughly 65% equity deployment in March — near the minimum permitted for a flexicap fund. That number has since moved higher, and Shenoy says the process is ongoing.
“The point is not to try to time the bottom, but let the market start to tell you when there is some kind of a recovery,” he said. “I do not think we are there yet in terms of a full recovery, but early signs are we are starting to get there.”
The fund is taking a phased approach rather than deploying all at once — a deliberate hedge against the possibility that more volatility lies ahead.
Not just smallcaps
With the smallcap index bouncing hard from March lows, much of the market conversation has centred on that segment. Shenoy pushes back on the narrow framing.
He points out that smallcap definitions have shifted — companies with market caps of Rs 30,000 crore now technically qualify, a threshold that would have been considered midcap territory just a few years ago. More importantly, he warns that many stocks riding the smallcap recovery do not yet have earnings data to back the move.
“A lot of recoveries tend to pick up even stocks which do not have a lot of stuff backing them,” he said. Largecaps, he notes, actually fell the hardest in February and March, which means their recovery has been proportionally strong too. His approach: deploy across all market caps based on opportunity, not category.
The sectors to watch
On sectoral bets, Shenoy is measured but directional. Large private banks are showing weak profit growth despite healthy credit numbers, with the RBI giving some provisioning relief that signals underlying caution. IT commentary has been similarly uninspiring.
Where he sees longer-term conviction is in defence, industrials, and manufacturing — though he is waiting for results and order book clarity before leaning in fully. His view on defence is structural rather than tactical: India needs self-sufficiency in defence and eventually in oil and gas, and that theme does not go away regardless of near-term geopolitical shifts.
Earnings season: Kitchen sinks and hHidden positives
Shenoy expects some manufacturing companies — including select auto names — to report subdued results, partly due to input cost pressures and supply disruptions. But he frames some of this negatively as potentially useful: companies may use a weak quarter to dump accumulated losses in one shot, clearing the books for a cleaner run over the next three to four quarters.
“If it is expected that a result is going to be subdued, a lot of the kitchen sink items go in there,” he said.
His bar for a genuine positive surprise this quarter: profit growth north of 15%. Anything above that, in the current environment, would stand out.
For now, Shenoy’s message to investors is clear — deployment makes sense, but patience with data matters more than chasing price moves. The results will do the talking.