Indian corporate profits have surprised on the upside, but according to Dharmesh Kant, Head of Equity Research at Cholamandalam Securities, the good news on profits may be about to collide with a very real cost problem. As reported by The Economic Times, Kant warns that input costs are the new risk facing companies, with uncertainty prevailing in the current market environment. His base case suggests clarity may emerge by mid-June, but warns that if the situation extends beyond that, the worst is not yet behind us.
Despite cost pressures, Kant identifies three sectors worth owning right now that offer relative stability. According to The Economic Times, defence remains a steady compounder with strong order books, improved execution across companies, and structurally supported demand. His top picks include Hindustan Aeronautics and Mazagon Dock. In healthcare, particularly diagnostics and hospitals, Metropolis and Thyrocare reported strong numbers, reflecting a broader shift toward preventive and personal care. On the hospital side, Narayana Hrudayalaya and Apollo Hospitals remain solid long-term plays.
The telecom sector presents a clear differentiation with Bharti Airtel as the only clear bet for investors seeking telecom exposure. As reported by The Economic Times, the standout differentiator for Bharti Airtel is its Africa business, which has performed exceptionally well and is expected to grow at a high-20s to early-30s run rate going forward. While Vodafone Idea remains cheap on valuation and showing early signs of customer stabilisation, it remains a speculation bet according to Kant's analysis.
The real estate sector faces headwinds, with Kant advising proceed with caution in this space. According to The Economic Times, the road ahead has margin pressure, geopolitical uncertainty, and sector-level divergence. His advice remains straightforward: stay stock-specific, stay patient, and stick to sectors with genuine structural support as the market navigates through these challenging conditions.
