Speaking to ET Now, Pankaj Pandey, Head Research, ICICIdirect.com highlighted that the IT index has seen a 20% year-to-date decline, pushing valuations to four-year lows. “Some of the positives which are still ignored is, say, for example we have seen a decent amount of currency depreciation of Indian rupees versus euro of 11 odd percent against pound it is about 6.5 odd percent,” Pandey said. He added that these currency movements could ease margin pressures but cautioned that the AI-led rally in global markets needs to settle before a sustainable recovery in IT stocks can take shape. “Valuation-wise and price correction-wise risk-reward is better, but when the reward will come we do not know,” he noted.
On the healthcare front, optimism remains high as the sector continues to deliver strong updates. “In the healthcare space what we like is the hospital as a space. Our sense is that overall hospitals can deliver 17-18% kind of a growth over the next three-four years largely because of rising disposable income,” Pandey said. He pointed out that leading hospital chains plan to add nearly 20,000 beds to their current capacity of about 46,000, and that organised players are likely to gain market share. Among key picks, he mentioned Apollo Hospitals, HCG, and Narayana Hrudayalaya as preferred bets.
Turning to banking and financial services, Pandey expressed continued confidence in both PSU and private banks. “On the PSU banks what we are liking is SBI, then beside that Indian Bank. Indian Bank also came out with pretty good set of numbers,” he said. He added that Bank of India has shown stronger advance growth than the overall system, and that margin pressures are already priced in. According to Pandey, with FPIs no longer heavy sellers, “BFSI as a segment can incrementally improve and protect lower levels in the Nifty.”
In the fashion retail segment, momentum appears mixed as competition intensifies. “In this fashion retail space Trent numbers are slightly soft even though the base was higher last year,” Pandey said. However, he remains optimistic about growth in the second half, citing lower GST rates as a key tailwind. “Besides Trent, what we like is Arvind Fashions because for them 40% of the portfolio will benefit from this lower GST levels and our sense is that we would see margin recovery shaping up well for that company,” he added.
As India’s earnings season gathers steam, investors seem to be weighing valuation comfort in IT, structural growth in healthcare, resilience in BFSI, and recovery prospects in fashion retail—all of which could determine the market’s direction in the weeks ahead.
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