Chandan: Private Banks at 5-Year Lows, Fundamentals Up
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- Nimesh Chandan characterizes current market conditions as a 'speed bump, not a structural issue,' noting that ceasefire talks suggest the economy is moving away from geopolitical storm.
- Many Indian companies have improved earnings, balance sheets, and cash flows, yet trade cheaper than they did two years ago — a divergence Chandan flags as a broad buying opportunity.
- Chandan's sectoral preferences lean pro-cyclical: financials, materials, and industrials — specifically private banks, metals, cement, defence, and power — alongside selective consumer discretionary (two-wheeler autos) and pharma/healthcare.
- Private banks are his standout call, with credit growth picking up, asset quality benign, and valuations 'extremely attractive' — stocks are near five-year lows while fundamentals are improving.
- IT services is his underweight, with Chandan citing both structural and cyclical concerns around AI-driven uncertainty pressuring valuations and growth visibility.
- Chandan highlights a broad-based consumption recovery from grocery to jewellery to property, supported by tax cuts, lower interest rates, and wealth effects, with preference for strong brands with pricing power.
Why it matters: Chandan's most concrete trade is private banks trading near five-year lows even as credit growth accelerates and asset quality holds — a rare value-and-growth setup. His 99%-invested stance signals conviction in stock selection over market timing, while the pro-cyclical sector tilt bets that India's credit and consumption cycles haven't peaked despite recent volatility.
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