Aman Chowhan said monsoon concerns are not a major risk for earnings at this stage, but crude oil remains the dominant macro variable. He noted that even in a scenario where geopolitical tensions ease, oil prices could remain elevated, keeping pressure on corporate earnings. “Monsoon is not a big worry. A weak monsoon may have some impact. The bigger issue is crude oil. Even if there is a deal with Iran, oil can stay around 80. That is the real risk.” He added that the impact of higher oil prices is likely to show up more clearly in upcoming quarters. “March quarter was fine due to inventory. June will show the impact. We see a 100–200 bps hit from higher oil prices.”
On the earnings outlook for FY27, Chowhan said visibility remains limited and companies themselves are still assessing the impact. “Earnings revision is yet to happen. Companies themselves are unsure of the impact. We will know more in a few weeks.” He added that the key pressure point is likely to be margins rather than demand. “The risk is more on margins than topline. Demand is holding up well.”
On portfolio positioning, he said allocation has shifted toward defensive and structural themes, especially in a high crude oil environment. “We are buying renewables—solar, wind, ethanol. That is a key theme.” He also highlighted increased exposure to pharma and domestic manufacturing as preferred areas for incremental investment.
On the IT sector, Chowhan remained cautious despite recent corrections, citing structural concerns around artificial intelligence and valuations. “We exited IT six months ago. No hurry to re-enter. Upside is limited.” He said AI-led efficiency improvements could challenge India’s traditional low-cost advantage, keeping valuation multiples under pressure. “AI will improve efficiency, but it pressures India’s low-cost model. Valuations may stay under pressure.”
On consumption, he maintained a constructive view on demand but flagged near-term margin pressure due to rising input costs, particularly metals. “Demand is strong. We like discretionary and durables.” However, he added that higher metal prices could weigh on profitability in the short term.On other sectors, he said capital market-linked businesses such as wealth and broking remain attractive due to strong business models, while infrastructure has turned neutral due to fiscal pressures arising from higher oil prices. “Infra is neutral due to fiscal pressure from higher oil.”In financials, Chowhan said fundamentals remain healthy but foreign institutional investor (FII) selling continues to weigh on sentiment. “Banking is good, but FII selling is a headwind.” Within the space, he continues to prefer NBFCs and private banks over PSU banks.
He also highlighted FCNR inflows as a supportive factor for the currency, noting that attractive yields could draw meaningful foreign inflows. “FCNR inflows are positive for the rupee. Returns can be attractive, even 12–15% with leverage.”
On tactical opportunities, Chowhan pointed to chemicals, defence, and select engineering stocks as areas of interest, supported by currency benefits and relative valuation comfort.
