"Start accumulating, worst is priced in”: Nischal Maheshwari on market strategy
Why it matters: Nischal Maheshwari's strategy could guide investors to deploy capital into private banking and auto stocks.
- Nischal Maheshwari suggests that despite 10-12% earnings growth over the past two years, markets hovering at similar levels since April 2024 indicate a significant valuation correction, with much downside risk priced in.
- Maheshwari cautions that volatility will persist due to geopolitical tensions, recommending investors deploy capital in 10-15% increments rather than all at once to navigate uncertainty.
- Valuations are currently around 17-18 times FY27 earnings, which Maheshwari considers reasonable even with conservative estimates of flat earnings growth between FY26 and FY27.
- Private sector banking stocks are highlighted as a strong opportunity, trading at valuations not seen in 4-5 years despite 12-15% earnings growth, largely due to FII selling pressure.
- IT sector offers a short-term trading opportunity with a potential 10-15% upside over three months, though it's viewed as tactical rather than a long-term investment.
- InterGlobe Aviation is seen as favorable for buying, while retail stocks are advised against for new investments, with preference given to the automobile sector, specifically Mahindra & Mahindra, for the consumption theme.
- Maheshwari advises staying away from high-valuation stocks across all sectors and recommends a wait-and-watch approach for the pharma sector.
Nischal Maheshwari believes the worst of the market correction is priced in, making current declines buying opportunities, despite anticipated continued volatility from geopolitical tensions. He advocates for a disciplined, staggered investment approach, favoring undervalued sectors like private banking and select auto stocks over high-valuation names.
