Varun Fatehpuria, Founder & CEO, Daulat Wealth Management, says this is the best time to buy the dips. (Daulat Wealth Management)AI Quick ReadVarun Fatehpuria, Founder & CEO, Daulat Wealth Management, believes this is the best time to be a buyer. While there are still uncertainties due to the US-Iran war, it has also presented a window of opportunity for genuine long-term investors, Fatehpuria said. In an interview with Mint, the founder of Daulat Wealth Management shared his views on the current market structure, IT, and large private banks, among other things. Edited excerpts:
Oil is India's largest macro variable outside our control, and at $100+ per barrel, every $10 increase adds roughly $13-14 billion to the annual import bill.
That said, the structural demand picture for oil is weakening- EV adoption is accelerating, US and China auto sales have plateaued, and OPEC+ has signalled higher output.
India is also better positioned today than in 2013- services exports and remittances are significantly larger, so the same oil trade deficit causes a smaller current account gap.
On earnings, FY26 Nifty EPS growth was already modest at around 10%. If oil stays above $100 through the year, FY27 earnings growth – which was expected at mid-teens – could moderate to high single digits.
Corporate balance sheets are the strongest they have been in two decades, with Nifty 50 ex-financials sitting at near-zero net debt and are well positioned to absorb that pain.
Inflation has resurfaced as a concern globally, but it is almost entirely supply-driven, which means it is likely transient.
US CPI jumped to 3.3% in March on a record gasoline spike, and the Fed is now split between cutting and hiking.
In India, CPI is still benign at around 3.4%, but the RBI has flagged FY27 inflation at 4.6% and paused its rate-cutting cycle at 5.25%.
The key point for investors to understand is that India's macro fundamentals- inflation, fiscal deficit at 4.4%, external debt at 19% of GDP, and bank NPAs at 0.5%- are in far better shape than in any previous crisis.
The government has also acted proactively, cutting excise duties and creating a stabilisation fund.
This is the best time to be a buyer. Yes, there are still uncertainties regarding the eventual outcome of the truce, but this has also presented a window of opportunity for genuine long-term investors.
The Nifty's trailing PE has fallen below 20 times on Q4FY26 estimates, which is at or below its long-period average of 18.9 times.
The top 10 stocks in the Nifty are at their 17th percentile of historical valuations — levels last seen in 2016 and 2020. The bond yield to earnings yield gap is just 1%, which is an attractive zone for owning equities.
And we have had four consecutive months of negative returns on the Nifty, something that has happened only 7 times since the 1990s- historically, forward returns from such points have averaged 12% over three months and 41% over one year.
The caveat: focus on large caps where value is clear. Small and midcaps at 32 times median PE are still 59% above their long-term average and need more time. Therefore, one needs to be selective in SMIDs.
We have always advocated for building globally diversified portfolios. However, any allocation now should not be in direct response to the underperformance of Indian equities over the last 18 months, but more of a way to create an all-weather portfolio that can perform in varied market cycles.
India captures only nearly 4% of the global equity opportunity, and there are themes like AI, Semiconductors, and Social media platforms that are underrepresented in a domestically biased portfolio.
Investors should initially look at mature markets like the U.S. and European markets to build their international investments and then slowly diversify to other markets like Korea, Taiwan, and Japan once they are familiar and comfortable with the risks. Over time, they can allocate 15-20% of their equity allocation to the international markets.
I would split it roughly 80-20 in favour of equity, with the equity portion going into large-cap oriented funds or multi-cap/flexi-cap strategies that are currently overweight on banks, IT, and healthcare sectors, where valuations have corrected.
Don't deploy all at once; stagger it over 12-16 weeks so you benefit more if markets fall further. For the 20% in debt, prefer short-duration funds or corporate bond funds where you are locking in 7-7.5% yields with limited interest rate risk.
Large private banks are our highest conviction call- HDFC Bank at 2 times book, Axis Bank at 1.8 times, ICICI at 2.6 times- these are decade-low valuations for businesses earning 15-18% ROE.
Banks may benefit from the current environment through a steeper yield curve and higher working capital demand.
IT is our big contra bet- the sector is down 25% this year, with TCS and Infosys trading below long-term average multiples despite high ROEs.
The market is pricing in AI disruption as a death sentence when the reality is more likely adaptation. Healthcare and insurance also look attractive at current levels.
Read all market-related news here
Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
Nishant is a market reporter at Mint, where he holds the official designation of Principal Correspondent – Markets. He has been closely tracking the Indian stock market as well as major global stock markets along with the broader macroeconomic trends for a decade.
<br><br>
He is obsessed with breaking down complex financial and economic concepts into clear and engaging stories. He focuses not only on what is happening in the markets, but also why it matters.
<br><br>
His coverage includes stock market trends, sector rotations, monetary and fiscal policy developments, inflation, growth data, and personal finance strategies.
<br><br>
With nearly 10 years of experience in covering financial markets, Nishant has covered bull markets, corrections, policy transitions, and macro developments that has equipped him with a deep understanding of how domestic and global forces shape markets and affect investments.
<br><br>
He regularly interviews market veterans, fund managers, economists, policymakers, and corporate leaders to provide readers with a 360-degree view of market dynamics and the broader economic landscape.
<br><br>
Before joining Mint, Nishant worked with some of India’s most respected business newsrooms, including The Economic Times and Moneycontrol, where he reported extensively on the stock market, corporate earnings, macroeconomic trends, GDP, inflation, monetary policies of the RBI and the US Federal Reserve, bonds, and currencies.
<br><br>
Apart from economics and investing, he has interests in geopolitics and emerging technologies, such as AI.