Auto & Consumer Discretionary Recovery

Khanna expects the automobile and consumer discretionary sectors to benefit from pent-up demand, particularly after a sluggish Q1FY25. This is an essential consideration for investors, as these sectors may post strong gains, leading to better-than-expected results.

Cautious Outlook on IT & Consumer Durables

Khanna adopts a defensive approach toward IT and consumer durables, citing competitive pressures and high valuations. He notes that in consumer durables, heightened competition is likely to impact return on equity (ROE) negatively over the medium term.

The China Stimulus: A Trigger for Market Correction?

When asked about recent market corrections, Khanna pointed to the impact of China’s stimulus measures, though he believes this was merely a trigger. He emphasizes that while external factors like the SEBI’s rejig of F&O norms and tensions in the Middle East contributed, the valuation concerns were the primary underlying cause.

Looking Forward: Opportunities Amid Market Volatility

In light of current corrections, Khanna remains focused on value investing. He is cautious in the financial sector, choosing not to overexpose but remains open to opportunistic buys.

Frequently Asked Questions (FAQs)

Q: What sectors are expected to perform well in Q2FY25?
A: Auto, consumer discretionary, and pharmaceuticals are expected to recover due to pent-up demand and better market conditions.

Q: Why is Purnartha overweight on capital goods and infrastructure?
A: Government spending on infrastructure and the rise of private capex are driving these sectors, which have long build-out periods and high capital requirements, making them solid investment opportunities.

Q: Is now a good time to invest in metals and mining?
A: Yes, Khanna believes that metals and mining present growth opportunities, particularly in the multi-asset Purnartha One Fund.