Khemani: India Market Dip Is a Buying Opportunity
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- Vikas Khemani warned that Q1 earnings for companies exposed to global trade could come in 20-30% below expectations due to supply chain disruptions and elevated energy prices, while sectors like BFSI would see little to no meaningful impact.
- Khemani framed the selloff as opportunity, arguing that since 80-90% of a company's value comes from terminal value, a 20-30% stock correction from one or two quarters of disruption is 'more of an opportunity than a risk.'
- Carnelian (Khemani's fund) meaningfully increased exposure to banking and financial services at corrected valuations, which Khemani called 'very, very reasonable and attractive,' and also added to aviation and automobiles.
- Khemani rejected the AI-threat narrative for Indian IT, arguing IT firms will implement and deliver AI solutions to global clients, and noted several large IT stocks are already down 20-40% from their peaks with rupee depreciation cushioning dollar earnings.
- Khemani drew a parallel to the post-2000 tech transition, pointing out that newer names like HCL Tech, Persistent, and LTTS dominated the next decade over Wipro and Infosys, and said the same AI-era rotation is now underway with Carnelian having identified likely winners over the past one to two years.
- On the macro outlook, Khemani said global disruption tilts in India's favour medium-term, citing the EU free trade agreement already in place, expected recovery in manufacturing demand, and oil retreating from elevated levels as supportive factors.
Why it matters: Khemani's call puts capital behind three specific, divergent bets during an earnings trough: BFSI and aviation as tactical adds, and Indian IT as a contrarian AI-era play where stocks are already 20-40% off peaks — meaning the next leg depends on whether his terminal-value thesis holds once Q1 results actually print.
