ETMarkets.comValuations not yet cheap
Bandyopadhyay was clear that today’s market bounce should not be mistaken for a trend reversal. “Markets were looking oversold and short-covering is happening — I will not get too excited,” he told ET Now. But he was equally emphatic that the pullback creates a selective entry window for disciplined, long-term investors.
L&T: A contra buy despite West Asia exposure
Larsen & Toubro remains Bandyopadhyay’s top conviction idea even as reports suggest caution. He acknowledges the challenge — a significant portion of L&T’s order book is anchored in West Asia, and the ongoing regional conflict will create near-term execution headaches. But his thesis is forward-looking: once the turbulence subsides, L&T’s standing in the region is likely to generate a larger pipeline of orders, not a smaller one.
“If we can digest this turbulence, L&T at current levels is definitely a very-very good buy,” says Bandyopadhyay.
BFSI: PSU banks remain a core long-term holding
Banking has been Bandyopadhyay’s favoured BFSI segment for nearly a year, and the recent correction has only reinforced that view. State Bank of India, in particular, stands out after its pullback as an attractive addition to any long-term portfolio. He sees no fundamental reason to change that conviction — PSU banks have clean balance sheets, improving credit quality, and the tailwind of a growing Indian economy behind them.
Chemicals and agrochemicals: Turbulence, but the thesis is intact
The speciality chemicals and agrochemicals sector has had a bruising two years — “completely bombed out” in Bandyopadhyay’s words — before green shoots appeared in Q2 and Q3 of the current fiscal. The West Asia conflict has brought fresh headwinds: raw material availability, input cost inflation, and disruption to export shipment routes.Yet the structural driver — China plus one supply chain realignment — remains firmly in place. Bandyopadhyay argues that once geopolitical noise fades, this sector is positioned to outperform broad markets. He names UPL and Aarti Industries as specific accumulation opportunities, with UPL’s recent restructuring-linked selloff viewed as an attractive entry point rather than a red flag.
EMS sector: Press Note 3 relaxation changes the valuation calculus
The government’s relaxation of Press Note 3 — which governs investment approvals from border-sharing nations — has injected fresh life into the electronics manufacturing services sector. Bandyopadhyay believes the policy shift unlocks both capital and valuations for the space. Dixon Technologies, despite not yet being covered by JPMorgan, receives a buy recommendation from him at current levels. A pending viewer approval, once granted, could trigger institutional analyst coverage and re-rating. Cyient DLM is cited as another name where valuations — around 50–60x PE — are justified given 20–40% annual growth expectations.
Metals and mining: Aluminium shortage adds fuel to an already strong run
Bandyopadhyay has been bullish on metals for some time, and the West Asia conflict has paradoxically strengthened that call. Refinery closures in Qatar and surrounding areas are tightening global aluminium supply, directly benefiting domestic producers. Nalco and Vedanta are his top picks in aluminium, both seen as likely to continue outperforming. Tata Steel rounds out a three-stock metals portfolio he recommends for long-term investors.
Hindalco is the one name carrying some near-term uncertainty — a fire incident at its US facility adds operational risk — but Bandyopadhyay does not dismiss the stock outright for long-term holders.
KEI Industries: Good company, but patience required
KEI Industries is the one stock where Bandyopadhyay counsels restraint. While acknowledging strong underlying demand in the wires and cables segment, he notes that raw material prices have “really shot up” and the operating environment is genuinely difficult right now. Crucially, valuations have not corrected enough to provide a sufficient margin of safety. His advice: wait for the geopolitical situation to stabilise before beginning to accumulate, even for those with a long investment horizon.