Dharmesh Kant sees buying opportunities in largecaps despite volatility; defence, banks in focus
Why it matters: Dharmesh Kant's outlook suggests investors can find value in specific largecap sectors despite potential 4-7% market corrections.
- Dharmesh Kant anticipates potential near-term market corrections of 4-7% but maintains a constructive broader outlook, citing global signals of de-escalation.
- Largecap stocks, especially in infrastructure and banking, are preferred over mid and smallcaps due to better risk-reward, with Larsen & Toubro highlighted in infrastructure.
- Banking sector shows strong credit growth, making select banks like Axis Bank, IndusInd Bank, Bank of India, and Bank of Baroda attractive despite NPA concerns already factored into valuations.
- Defence sector offers long-term opportunities with companies like Bharat Electronics (BEL) and Hindustan Aeronautics (HAL) maintaining strong operational performance and order books, despite recent underperformance.
- Metals are on the radar, with Hindalco, Vedanta, and NMDC poised to benefit from infrastructure push and improving commodity demand.
- Nifty earnings per share (EPS) growth for FY27, initially projected at 12-14%, could still face a 2-3 percentage point hit due to geopolitical tensions, but is expected to stabilize around a reasonable trajectory.
- Market valuations currently reflect a forward price-to-earnings multiple of around 17 times, suggesting much of the negativity is already priced in.
Despite potential near-term market corrections of 4-7%, Dharmesh Kant sees compelling buying opportunities in largecap stocks, particularly in infrastructure, banking, defence, and metals, driven by an improving global outlook and attractive valuations. He advises a long-term view, as short-term volatility persists, but believes much of the negative earnings impact from geopolitical tensions is already priced in. Kant suggests investors focus on staggered investments rather than chasing momentum.
