“Even good news is being ignored due to fear in the system,” Tandon said in an interview with ET Now. “But this is exactly the phase when investors should increase India exposure. The country has underperformed both developed and emerging markets, and the stage is set for an upside.”
According to Tandon, Quant Mutual Fund is 98% invested across sectors and is not adding fresh positions at the moment. “This is a market where holding large cash makes little sense. Staying invested in quality themes like consumption, IT, and pharma is the way forward,” he said.
Retail investors driving the cycle
Tandon credited retail investors for providing leadership in the current market. Despite lacklustre returns over the past year, monthly SIP inflows remain steady, showing no signs of nervousness. “Retail investors have demonstrated patience and intent. They continue to back equities, even in mid- and small-cap segments. This is a very constructive sign for the market,” he said.
Pharma outlook still strong
On the pharma sector, Tandon reiterated his long-held bullish stance. He dismissed fears around potential US tariffs, saying Indian generic companies remain indispensable in the global supply chain. “There is no substitute for Indian generics in the short term. Even US pharma majors will find it hard to shift suppliers overnight. In fact, Indian firms are now looking beyond the US to Europe and other markets,” he said, adding that Quant Mutual Fund is already fully invested in the sector.
IT nearing bottom, largecaps preferred
Tandon also sees a turnaround in IT stocks after a prolonged weak spell. “Noise around the HIRE Act and foreign worker taxes looks overdone. Earnings may bottom out by the September quarter, and by December, we could see upgrades. With under-ownership and sentiment so negative, IT could outperform over the next 6-12 months,” he said. However, he prefers largecap IT names over midcaps due to better liquidity and valuation comfort.
FMCG and consumption re-rating
While autos have gained from the GST cut, Tandon is more optimistic about FMCG companies, particularly in the food space, where tax rates have dropped from 18% to 5%. “This will push consumers toward branded products at better prices. It’s a long-term rerating story that could drive earnings and valuations higher,” he said. Autos, he added, will also benefit, but FMCG has stronger multi-year potential.
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