Stocks to Buy | Shiv Chanani’s guide to building a long-term winning portfolio
1/5
Midcaps, smallcaps & consumption — a long-term play
Shiv Chanani in an interview to ET Now said that the excitement around midcaps, smallcaps, and the consumption theme isn't just a short-term trend for the second half of the financial year. Instead, he views these as structural stories with the potential to play out strongly over the next five to ten years. India’s demographic strength and its status as a high-growth economy provide all the necessary and sufficient conditions for these themes to deliver handsome returns to long-term investors.
2/5
India's resilience amid global tariff uncertainties
On the issue of global tariff disruptions, Chanani points out that India’s relatively small share in global exports actually works in its favor. Because of this limited exposure, the country is somewhat shielded from the major shocks that tariffs might bring. While some sectors could be marginally impacted, he does not foresee a significantly adverse outcome. Additionally, with ongoing global tariff negotiations progressing gradually, India is likely to reach favorable terms just like other major economies.
3/5
Valuations – India's premium is justified
Addressing concerns about high valuations in Indian markets, Chanani draws a comparison with Mumbai real estate—often seen as expensive, yet always in demand. He argues that instead of looking at simple valuation metrics like price-to-earnings in isolation, investors should consider them alongside return on equity and capital efficiency. More importantly, India offers liquidity and the ability for investors to not only earn on paper but also exit with real profits. This confidence is a major reason why India justifies its valuation premium.
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4/5
Cash position – strategic & sentiment-driven
When asked about the cash position of their funds, Chanani reveals they are currently holding about 4-5% in cash, varying by fund. This cash level is maintained within predefined internal limits, based on market outlook and sentiment. The approach is not static—it’s a reflection of the fund house’s dynamic risk management strategy, ensuring that they remain both flexible and responsive to market developments.
5/5
Building a long-term portfolio
Chanani emphasizes that for any investor, the first step should be understanding their investment objective and time horizon. Particularly in midcap, smallcap, or theme-based investing, a minimum time horizon of three to five years is essential, with five years being preferable. This duration allows businesses to scale and smooths out short-term economic cycles. His firm looks for companies with strong and sustainable earnings growth, capable management, and attractive valuations—key traits for building a robust long-term portfolio.