According to reports from The Economic Times, Nikhil Khandelwal, CMD of Systematix Group, is urging investors to maintain a disciplined and diversified approach during the current period of geopolitical tensions. He advises against deploying capital all at once, recommending a staggered capital deployment over the next three to six months instead. Khandelwal emphasizes that until crude oil normalizes and the rupee steadies, the market lacks clear direction. His framework prioritizes resilience over aggression in current market conditions, with the West Asia crisis layering supply chain disruptions on top of energy price volatility, hitting factory output data and creating turbulence for several critical industries.
As reported by The Economic Times, Khandelwal favors PSU banks, IT, and capital goods for their resilience and attractive valuations. On IT, he makes a contrarian call, noting that while the sector faces AI disruption concerns, ground-level conversations with companies suggest order books are not depleting at the pace markets fear. Indian IT firms are actively building AI transition capabilities for enterprises, with Khandelwal stating that "this sector will see slower growth this year, but it is not going to be a degrowth year." The defence sector is also highlighted, with companies like BEL, BHEL, Hitachi, and Siemens recommended for accumulation at current market levels, benefiting from India's domestic defence build-out. With valuation corrections already completed, quality IT businesses are now available at low-teen earnings multiples offering strong long-term value for patient investors.
According to The Economic Times report, Khandelwal is steering clear of real estate, jewellery, airlines, and rate-sensitive plays. The jewellery sector requires high discretionary spending and faces policy headwinds following government signals about reducing gold purchases. Airlines face structural cost pressures, while rate-sensitive sectors lack the earnings resilience prioritized in the current environment. Crude oil and the rupee are identified as key variables that will determine market direction in the coming months, with earnings and volume growth data expected to clarify the real impact of current disruptions.
As reported by The Economic Times, Khandelwal notes that April and May have been broadly positive for the market, but the current environment demands selectivity. His playbook focuses on sectors with earnings clarity, valuation support, and macro resilience, with PSU banks, IT, and defence sectors meeting these criteria in the current market conditions. The strategy emphasizes patience and selective allocation, with the firm not being bearish on India overall despite global uncertainties. Khandelwal's approach prioritizes sectors that can weather current volatility while positioning for long-term growth opportunities as market clarity emerges.
