“Despite the correction, the market hasn’t meaningfully corrected to justify the tepid growth we see in certain sectors. So, we prefer to wait until better opportunities come towards us,” he said.
US rally driven by tech giants, not broad-based
Onkar also highlighted the concentration risk in U.S. markets, where the S&P 500 and Nasdaq have hit record highs largely because of the “Magnificent Seven” mega-cap technology stocks.“These are not just tech companies—they represent long-term trends like digital advertising, cloud services, e-commerce, and semiconductor innovation,” he explained. “The index reflects cash flow and earnings growth as much as stock prices. But one must be cautious about valuations.”
While Indian companies are still mainly users rather than creators of cutting-edge tech, Onkar pointed out that India’s strong talent base in chip design and engineering could eventually help the country play a bigger role in the global tech supply chain.
Auto & EV outlook: Long-term story intact
The GST reset and EV adoption trends were also in focus. Onkar said PPFAS has not added new auto holdings recently but continues to hold significant stakes in Mahindra & Mahindra and Maruti Suzuki.“EV adoption should not be judged by quarterly news flow. We have moved from almost zero indigenous technology three years ago to meaningful manufacturing today. The EV ecosystem—both two- and four-wheelers—is steadily building up, supported by power grid expansion and infrastructure upgrades,” he said.
Onkar added that EVs will continue to grow in relevance despite pricing resets, and that ICE leaders transitioning to EVs will be crucial beneficiaries.
Debt and hybrid funds gaining appeal
With equity valuations elevated, debt has become an attractive option, according to Onkar. PPFAS has parked some cash in short-term debt instruments such as CDs and CPs.
“Investors should reallocate between equity and debt through hybrid funds to rebalance portfolios. It’s a great time to add debt exposure after the one-way equity move of recent years,” he noted.
Consumer stocks still too expensive, except ITC
Onkar said the consumer goods space remains overvalued despite GST cuts and policy support. The only exception in the PPFAS portfolio is ITC, which was accumulated during the COVID-19 crash.
“ITC still trades at reasonable valuations, has solid cash flows, and a stable dividend policy. Other consumer plays remain too expensive for our comfort,” he explained.
Defence & manufacturing: Right direction, but needs patience
Onkar urged investors not to conflate stock rallies with business fundamentals in sectors like defence, railways, and shipbuilding.
“These sectors are moving in the right direction, but expectations may be ahead of actual delivery. Over time, indigenous technology and strong order books will translate into cash flows. But patience is required,” he said.
Go for a selective, patient approach
Summing up, Onkar reiterated that PPFAS will stay cautious until valuations become more attractive. “Markets are expensive, even after the recent correction. We prefer to hold cash and wait for opportunities while selectively adding quality businesses at reasonable valuations,” he said.
as a Reliable and Trusted News Source