investors advised to build high-quality portfolios amid market consolidation

Swati Khemani, the founder of Carnelian Asset Management, suggests that investors should focus on building a high-quality portfolio over the next three to six months as the market undergoes a period of consolidation or correction.

Sector Focus

According to Khemani, investors should consider promising sectors such as:

  • Auto ancillaries
  • Credit players with strong liability franchises
  • Insurance
  • IT (specifically ER&D and SAAS)
  • Pharma (focusing on CDMO and CRO)

Khemani also anticipates positive momentum in the chemicals sector later in the year.

Stock Selection

When selecting stocks, Khemani emphasizes the importance of:

  • Credible management
  • Reasonable valuations

She expresses caution regarding the microfinance sector due to structural challenges and favors larger banks and established NBFCs instead. However, she views capital market players as attractive investment opportunities with potential for significant growth.

Market Outlook

Khemani believes that while broader market returns may be limited this year, there will still be opportunities for selective, stock-specific investments. She emphasizes the importance of thorough research and a disciplined investment strategy.

Overall, Khemani's perspective highlights the potential for growth in specific sectors while acknowledging the risks associated with certain investment areas.

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