Now is the time to start deploying money into markets, says Nitin Raheja; here's where to look

After a sharp fall in March and a recovery in April, Indian markets are entering a phase where selective, staggered investing makes sense — at least that is the view of Nitin Raheja, Managing Director and Senior Advisor at Julius Baer Wealth Advisors.

In a conversation with ET Now, Raheja said that while near-term volatility is unavoidable — driven by geopolitical tensions and oil price movements — valuations have corrected to levels that are "very, very attractive" from a long-term perspective.

"It is the time that one should start putting money to work and one can sort of stagger that," he said, adding that earlier expectations of 15–16% earnings growth may moderate by a couple of percentage points due to the impact of high oil prices on margins. However, he believes the earnings story is not broken — it may simply be pushed into the next financial year.

Power and energy: the sector you cannot ignore

Raheja was particularly bullish on the power and energy space. He sees opportunity across two broad themes — utilities benefiting from volume growth, including listed solar power companies, and capital goods players supplying the grid upgradation ecosystem. Transformer manufacturers, cable companies, and HVDC segment players all fall into this category.

Two structural drivers support this view: the expansion of renewable energy requiring long-distance transmission investment, and the anticipated data centre boom creating fresh demand for power infrastructure.

Financials: PSU banks now, private banks later

On banking, Raheja expects PSU banks to continue performing well over the next six months, with private sector banks likely catching up in the second half of the year as credit growth recovers. He noted that net interest margins (NIMs) have "clearly bottomed out." Rising working capital demand — as companies shore up inventory against supply chain disruptions — could be the catalyst.

He also flagged second-tier private banks with strategic stakes held by global investors as interesting longer-term stories.

Other sectors worth watching

Raheja identified insurance as a buying opportunity after recent disappointments, particularly in the life segment. Capital market plays and auto ancillaries also feature on his positive list.

In pharma, he prefers the domestic-focused pack over generics exporters — which remain exposed to policy risk — and also likes the CDMO space after its correction. Within autos, he favours companies in the premium vehicle segment, the tractors category, and the broader auto ancillaries pack as a bottom-up play.

On IT, Raheja sees short-term tactical value as valuations have corrected, but remains cautious longer term given structural challenges to traditional IT business models as AI reshapes the industry.

Defence: Add on every dip

On defence, his advice was straightforward — it is a long-term structural story, and investors should use dips caused by disappointing quarterly results (common with order-book-driven companies) as buying opportunities rather than reasons to exit.