Larger banks and corporate-focused NBFCs should be a decent part of portfolio now: Sandip Sabharwal

Sandip Sabharwal, asksandipsabharwal.com, says on a pure valuation basis, although many mid and smallcaps are looking very attractive right now, the initial up move as foreign funds come back, will be on the largecap side. The largecaps would move up first and then, small and midcaps could catch up. NBFCs, banks, the larger banks and the corporate-focused NBFCs, should be a decent part of the portfolio along with infrastructure-oriented companies. Auto should do well next year.

What is it looking like in terms of macros with the RBI injecting further liquidity and crude significantly cooling off, while the tariff flip-flop continues. Does it seem like we could be close to bottoming out at an index level at least?
Sandip Sabharwal: I mentioned on Monday that we are fully deployed because in our view risk-reward is extremely favourable in India. Given that the macros will be much better next year as liquidity improves, interest rates come down, government spending improves, and a lot of disruptions which were there last year are no longer there.

The other part which you mentioned obviously is the entire tariff issue. Now, the tariff issue impacts few industries more significantly from India because if you look at the composition of the exports, it is medical devices, pharmaceuticals, gems and jewellery, and textiles. These are the sectors which will get most impacted and so some companies in these sectors could get impacted depending on what the overall tariff outcome is.
But if we look at the picture holistically