Nifty could touch 29,000 going ahead if earnings growth sustains: Sanjay H Parekh – News Air Insight

Markets may see short-term weakness, but the medium to long-term outlook for Indian equities remains strong, according to Sanjay H Parekh, Founder and CIO of Sohum Asset Managers. Speaking to ET Now, Parekh said that India’s economic fundamentals remain robust, supported by healthy balance sheets across the government, RBI, corporates, and households.“Structurally, things are quite positive. Balance sheets are in good shape, though near-term growth has been weak due to GST-related destocking and tariff concerns,” Parekh noted. He expects the second quarter to stay soft, but foresees a recovery from the third quarter onwards, with earnings growth picking up in FY26 and FY27.

On the Nifty’s trajectory, Parekh said some “time and price correction of 2–4%” is possible in the next few months, but added that the index could move towards 26,000 and beyond as earnings visibility improves. Looking further out, he projects the Nifty could touch 29,000 levels if earnings growth sustains.

Sectoral bets: Domestic over global

Parekh emphasized that Sohum Asset Managers has been overweight on domestic sectors and underweight on global themes for over three years. Key areas of focus include financials, telecom, power & utilities, real estate, and renewables. The fund also sees opportunities in niche themes such as solar, recycling, and pre-fabricated structures.

While the consumption story remains attractive, Parekh said valuations in FMCG are still expensive, keeping the fund underweight in the sector. IT and oil & gas also remain underweight positions.

Preference for large private banks and SBI

Within financials, Parekh said the fund is tactically underweight on banks for now, citing ongoing asset-liability repricing pressures. However, he highlighted SBI, ICICI Bank, Axis Bank, and HDFC Bank as core holdings. “We prefer leaders in both private and PSU space, but SBI is our top PSU choice,” he added.

Investment philosophy: Growth at reasonable price

Parekh underlined that Sohum Asset Managers follows a “growth at reasonable price” (GARP) strategy. “We avoid chasing growth at any price. Our portfolio trades at less than 14 times FY27 earnings, with ROEs around 17% and growth of 15%—better than the Nifty, at lower valuations,” he explained.

He stressed on the importance of discipline, risk management, and process-driven investing, noting that risks can arise from management quality, capital allocation, or broader business factors.

“Being agile, process-oriented, and conscious of risk is as important as chasing growth,” Parekh said, summing up his investment approach.