“Given that it has been a roller coaster ride, financials had corrected a lot and the valuations are attractive, that is one space that we are adding both across NBFCs as well as banks. Second is IT, the valuations have also corrected fairly significantly. So, despite all the structural or maybe some of the medium-term headwinds we are still buying a little bit into IT,” he said in an interview with ET Now.
IT: Valuations Turn Attractive Again
Within the IT pack, Lokapriya remains selective but constructive. He points to improving deal pipelines and resilient margins as key positives, even as concerns around AI-led disruption linger.“If you look at, today’s TCS results were fairly good. The order book is fairly strong at about $12 billion. The margins have held up and the AI revenue bit of it is increasing as a percentage of total revenue. So, for TCS it is about 7-7.5%. And on the other hand, Wipro is doing a buyback. So, these tailwinds will help recoup some of the valuation… will help by because of the attractive valuations at the current levels,” he noted.
The commentary suggests that while near-term uncertainties persist, large-cap IT companies could see valuation support from strong execution and capital return measures.
NBFCs: Positioned for a Turn in the Cycle
Lokapriya is equally optimistic about non-banking financial companies, particularly those linked to the commercial vehicle cycle, which tends to recover early when economic activity stabilises.“NBFCs are well placed, especially Shriram, Chola, and all these commercial vehicle-facing companies and that is a cycle which is likely to pick up as the economy sometimes somewhere after all these wars and other disruptions when the economy stabilises, these are the first sectors that would benefit,” he said.
He also highlighted improving fundamentals at the company level.
“And we are seeing now in the specific company cases in the case of Shriram their upgrades reduces their cost of capital and their tier I capital is well, it is adequately capitalised and it gives it room to increase its loan growth rates, valuations are fairly attractive at about 1.7, 1.8 and the valuations have come down for NBFCs including Shriram due to various concerns on liquidity and that will gradually ease and therefore yes, Shriram, Chola, and Poonawalla maybe to an extent.”
Realty: Correction Opens New Opportunities
The real estate sector, which has faced multiple headwinds—from global uncertainty to IT job concerns—has also seen meaningful corrections, creating selective opportunities.
“The pack as a whole has corrected fairly significantly due to some of the feared headwinds such as if the war impact on residents in the Gulf investing into maybe the real estate into India. Second is IT job concerns and therefore impacted markets like Bangalore, Pune, and other markets where IT buying of real estate is a fairly big thing,” Lokapriya explained.
He added that tightening liquidity fears have further weighed on valuations but also pointed to emerging growth drivers.
“And some of these concerns have led to…, and also some of the fears of tighter liquidity. Various things put together have brought down valuations quite a lot and now companies like Lodha are also expanding into data centres. So, this is a new adjacency for real estate companies and with very long growth rates ahead of them. Second, Sobha has corrected. Phoenix has both retail as well as residential and these are the companies that we are looking at.”
Stock Picks: Cyclicals and Travel Recovery Plays
Among specific ideas, Lokapriya sees value emerging in cyclical and consumption-linked plays that have corrected on macro fears.
“Companies like Bharat Movers have corrected fairly significantly, that as a space will do well, medium term and longer term. Companies like Indian Hotels on fears of travel have also corrected. Travel will come back very soon. So that is another space,” he said.
He also remains positive on PSU banks.
“And of course the banks like State Bank of India and Union Bank of India in the PSU banking space, very strong banks, valuations are very reasonable, credit growth is very strong.”
Metals: Demand Revival to Drive Next Leg
On the metals front, Lokapriya believes the worst of valuation correction may be behind, with improving demand outlook acting as a catalyst.
“The metal basket one to begin with the valuations of the pack is very reasonable. Second is, there have been supply disruptions and on that fear some valuation had corrected. And third is, now there is going to be a resumption of demand and that demand is likely to be stronger due to various reasons. In fact, the rebuilding because of the war also,” he said.
He expects both steel and aluminium players to benefit.
“And because of that the steel, aluminium both look strong, so which means Hindalco as a company both its international and domestic operations are looking fine. Tata Steel, JSW Steel you will see a pickup in both the domestic activity as well as a holding up of the prices.”
Outlook: Volatility as an Opportunity
The broader message from Lokapriya’s strategy is clear: periods of uncertainty often present the best entry points. With valuations correcting across sectors and cyclical recovery themes intact, selective buying in financials, IT, metals, and real estate could offer meaningful upside over the medium term.
For investors willing to look beyond near-term volatility, the current market may be less about risk—and more about timing.