“When such crises come and go, the good news is that this time around, India’s economy and micro-institutions are much stronger than in previous crises. That at least gives you comfort,” Khemani said. “But certainly, as I always say, a good price and good news do not come together, so when there is a good price, it also has a bad news, which is today. Also, one must see that the long-term value of the equity does not change due to short-term movements, and that largely determines the equity, generally without expectation, such value is unpredictable. Put permanent teeth in any business, the opportunity to buy.
When asked where investors can find interesting buying opportunities, Khemani pointed to sectors that are closely related to the domestic economy. “Look at the banks that are fully aligned with the domestic economy. We have seen good adjustments because of this event. I know that in the short term, it can affect the profit of a quarter, but they do not change anything in the business. Consumer sectors and consumer sentiments can also change in the short term, even with some bumps in the margins even here and there, there is no change. The sector, which is very defensive in these times, ends up with flows. Passes, so the sectors associated with the normal domestic economy where you see big corrections due to this situation are buying opportunities.
Commenting on the difference in banking where some large private banks are under pressure while public sector banks (PSBs) offer valuations, Khemani said: “We really like both PSUs and we have owned some PSU banks recently. Historically, we have always been bullish on private banks, but in the last few years we have been more positive because of good growth in PSU banks and their valuation is clear. Three-four quarters, so we have Stay balanced in both areas.
As markets continue to face global and domestic uncertainty, Khemani’s advice points to a longer-term view: short-term volatility can present buying opportunities in fundamentally strong sectors.
