Talking to ETNow, Kohli noted that market dispersion has increased significantly, with companies being rewarded or punished purely on quarterly performance. Stocks that disappointed in Q3 were “beaten like anything,” while those delivering strong numbers saw meaningful traction.
“Wherever numbers are good, we have seen some traction there. We are believing that probably the way quarter three numbers have gone for the broader market, quarter four will also be better numbers and therefore market will start recognising these good numbers and start giving benefit to them,” he said.
Highlighting his portfolio’s performance, Kohli revealed that across 30 holdings, revenue growth stood at nearly 20%, EBITDA growth at 29%, and PAT growth at 40%. This strong earnings delivery led to a four to five percentage point outperformance versus the broader market, especially after a sharp drawdown in December and January followed by a strong recovery in early February.
On microfinance-linked stocks, Kohli acknowledged that the sector has faced persistent challenges over the past two years. While regulatory guardrails had begun stabilizing and regional issues in states like Karnataka and Tamil Nadu were subsiding, fresh concerns emerging from Bihar have renewed pressure. He explained that microfinance institutions (MFIs), which cater to vulnerable borrower segments, remain exposed to regulatory and political interventions.
Although regulations technically exclude registered NBFCs and banks, ground-level realities make distinctions difficult during collections, impacting sentiment and growth expectations. Kohli prefers companies transitioning away from pure MFI exposure toward more diversified lending models, such as small finance banking structures. However, he cautioned that north-based lenders with higher regional exposure may face continued near-term pain.
On the IT sector, Kohli remains cautious despite significant valuation corrections. He believes much of the derating has already occurred, but uncertainty around AI-led disruption and global demand, particularly in the US, makes it premature to deploy fresh capital. While management commentary has turned optimistic, he stressed that execution remains the key variable.
“We believe that there are other relatively much better sectors as of now available, so one should look at those sectors rather than going into this,” he said.
The critical question, he said, is whether IT firms can adapt AI to improve efficiency without eroding billing revenues. If AI reduces manpower requirements for clients, companies must demonstrate cost savings translating into stable or improved margins. Kohli prefers to wait for tangible evidence in quarterly numbers before reconsidering exposure.
In the auto space, Kohli expressed a clear preference for commercial vehicles (CVs), citing strong recent data and positive momentum for OEMs like Tata Motors and Ashok Leyland. However, instead of investing directly in large OEMs, he prefers midcap ancillaries — including forging companies, axle manufacturers, spring makers, and CV-focused tyre players.
In two-wheelers, he sees TVS Motor as a standout performer across segments, including EVs, and favors ancillary companies benefiting from its growth.