Against this backdrop, Raychaudhuri emphasized focusing on domestic growth opportunities rather than export-oriented sectors. He said he would avoid jumping into exporters and instead look for areas where growth aligns with reasonable valuations, highlighting basic materials, select industrials, and consumer discretionary segments as pockets of opportunity — while stressing the need to remain selective. Stocks such as Tata Steel, Hindustan Zinc, and Larsen & Toubro reflect the domestic cyclical themes he prefers.
He flagged consumer staples and IT services as areas of caution, arguing that staples suffer from low growth despite elevated valuations and that IT faces pricing pressure as artificial intelligence changes how clients evaluate contracts, potentially compressing margins. According to him, IT stocks may only become attractive at valuations closer to 10–12 times earnings, implying either downside or a prolonged period of sideways performance.
While acknowledging that some technology firms could stand out, he said companies demonstrating a clear ability to reinvent themselves — including through partnerships such as Infosys’ collaboration with AI players — may become more interesting over time, though he would wait for clearer evidence in growth or margin trends before allocating capital.
On foreign flows, Raychaudhuri noted that global investors currently have compelling alternatives across Asia where earnings growth is stronger and valuations are lower, suggesting that until this gap narrows, it may be difficult for India to see a sustained return of foreign institutional buying.
