The gas shock: short pain, long gain
Gujarat Gas, the country’s largest commercial gas supplier, has imposed severe supply restrictions — a direct consequence of the government redirecting gas toward domestic consumers and the CNG segment. PG Electroplast’s stock fell roughly 12% after it disclosed the cutoff, and at least one major chemical company has declared force majeure on its plant operations.
“This is a huge risk for almost the entire manufacturing industry — cap goods, chemicals, auto, the entire manufacturing sector. But in the shorter term, the market already knows it.”
Shah argues that while the pain is real for the near term, the market will price it in and move on once geopolitical tensions ease. Downstream distributors like IGL and MGL will see volume hits, and oil marketing companies could post heavy losses if crude stays at current levels. Both, in his view, represent buying opportunities — not sell signals.
Banking: the cycle is intact
Shah pushed back firmly against the narrative that PSU banks are structurally displacing private-sector banks. The data tells a different story: PSU market share has actually declined from 58% in 2020 to 52–53% today. The apparent weakness in private banks is largely attributable to HDFC Bank’s post-merger integration constraints, which limited its loan growth this past year. As those constraints lift, Shah expects private banks to reassert themselves.
His core thesis: the next leg higher in Indian equities will be led by banks. Large-caps in both categories — HDFC, ICICI, SBI — are preferred; smaller banks on both sides face idiosyncratic risks, from fraud exposure to NPA pressure from state-level farm-loan waivers. The one contrarian call is microfinance, where Shah sees a beaten-down sector offering asymmetric upside.
Power & summer demand: Play the ancillaries
Record temperatures are expected this summer, and Shah anticipates a corresponding surge in power demand. Rather than buying electricity generators, however, he favors the infrastructure and equipment layer — companies that benefit from more air-conditioner units running more hours per day. His top pick is IEX (Indian Energy Exchange), which he says continues to deliver strong business performance despite market-related overhang. PG Electroplast and Amber also remain on his radar, though he acknowledges stretched valuations across the AC-adjacent space.
Stocks on Shah’s radar
ETMarkets.com