According to CNBC TV18, Harsha Upadhyaya, Chief Investment Officer at Kotak Mahindra Asset Management Company, emphasizes that markets typically bottom out even before the war ends. Speaking about the current West Asia conflict, Upadhyaya noted that before the conflict began, the macro-economic environment was very benign with crude trading at $60 to $65 per barrel. He expects earnings trajectory to move up based on this favorable backdrop, which had already begun showing sequential earnings improvement. However, he warns that if you are waiting for the war to end, then you are paying a price in terms of valuation.
As reported by CNBC TV18, Upadhyaya acknowledges that higher crude prices could weigh on both economic growth and corporate margins. While some companies have already felt the impact in earnings, others may see it play out in coming quarters. However, he maintains that this is not a structural shift and expects most effects to be very short-term in nature. He emphasizes that it doesn't make sense to just look at the beneficiaries of this crude price increase, highlighting potential policy interventions such as windfall taxes that can cap gains.
According to CNBC TV18, Upadhyaya advocates for staying invested and building exposure gradually rather than reacting to volatility. He advises investors to clearly understand and not panic during uncertain times, emphasizing that when you have uncertainty, you keep participating with the long term in focus. On sector positioning, he remains wary of real estate despite recent corrections, citing slowing employment growth in the IT sector and sharp rise in property prices as structural headwinds. He also expresses skepticism about chasing crude-linked sector opportunities based on recent price moves, preferring a diversified approach rather than thematic or sectoral focus.
As reported by CNBC TV18, Upadhyaya maintains a disciplined framework for evaluating company-specific developments, including large acquisitions and management changes. He advises investors to assess what deals add in terms of synergy, cost efficiencies and margin expansion, and how quickly they can break even. Similarly, he recommends a fresh evaluation rather than knee-jerk reaction to leadership changes, noting they can signal potential shifts in direction but not guarantee success. The firm manages nearly $5 billion in assets and operates under this systematic approach across all investment decisions.
