According to The Economic Times, Dharmesh Kant from Cholamandalam Securities acknowledges the current market environment as particularly challenging for traders. Speaking with ET Now, he stated that "it is anybody's guess how this market will swing because one tweet, one statement here and there by Mr. Trump, who is the lead factor in this geopolitical situation, can decide the turn of markets anyways." Despite the near-term uncertainty, Kant believes valuations are beginning to reflect fair realism. He outlined a scenario-based framework for the Nifty, suggesting that under a base case—where geopolitical tensions ease within three to six months—the index could find balance in the 21,500–22,500 range. As reported by ETMarkets.com, Kant provided specific valuation estimates with EPS estimates of ₹1,230–1,240 for FY26 assuming zero growth for FY27, which would translate to fair valuations at current levels.
The market expert cautioned investors about potential downside risks in more adverse scenarios. According to The Economic Times, Kant warned that "Worst-case scenario which we have built in for the Nifty is the same number on 16 times that is anywhere around 19,680, so 19,500 to 20,000 level. So, 10% more from here, stocks may correct 20–25%." This scenario assumes continued geopolitical tensions and market volatility. The analysis suggests that while the base case scenario provides a balanced outlook, investors should prepare for potential corrections if geopolitical situations persist longer than anticipated.
As reported by The Economic Times, Kant highlighted defence as a clear play that is very much insulated from all this impact. He emphasized that defence companies are loaded with huge order books and structurally positioned in a space that is fully insulated from geopolitical developments. For automobiles, while potentially exposed to short-term headwinds, Kant noted that "the numbers of Q4 were very strong, so there also nibbling can help." Regarding metals, he suggested that "this is another space where one can help nibbling." However, he cautioned that IT stocks should be viewed more as a trading bounce rather than a fundamental shift, with structural concerns around AI-led disruption continuing to cloud the long-term outlook.
According to The Economic Times, Kant reiterated his long-term bullish stance on defence PSUs despite price performance challenges over the past year. He emphasized that while smaller companies face scale challenges, the sector overall remains structurally strong backed by robust order inflows. For investors seeking relatively stable cash flows, BEL is highlighted as a "cash cow kind of a company" because it supplies components and equipment used on a month-on-month basis. However, patience is key, especially for companies with longer execution cycles, with Kant noting that HAL and shipbuilding companies like Mazagon Dock may require waiting periods of three to four years for returns.
As reported by The Economic Times, Kant's advice to investors centers on quality stocks and a staggered investment approach rather than attempting to time the market. He noted that "the advice to investors is get into quality stocks, do a staggered manner of buying approach." With volatility likely to persist and macro triggers dominating sentiment, the market may remain directionless in the near term. Kant warned that "if next week this continues, then we are in for sharper downside movement on Nifty, maybe 7% to 8% immediately." His firm maintains its top three defence picks unchanged: BEL, HAL, and Mazagon Dock, emphasizing that these remain attractive despite current market conditions.
