Parekh remains particularly positive on telecom, with Bharti Airtel continuing to be one of the fund’s biggest overweight positions. “It will be a steady compounder, and if you give a 12 times EV to EBITDA, it could be at least 16-17% compounder for three years.”
He expects the company’s newer businesses, including cloud, data center and financial services, to become much more meaningful over the next few years. According to Parekh, Bharti Airtel’s enterprise and digital businesses are still not fully reflected in market valuations, making it a strong long-term core holding.
On Reliance Industries, he expects the refining and petrochemicals business to improve from the second quarter onwards as healthy refining margins offset higher logistics and insurance costs. He also believes Jio Platforms could attract strong investor interest whenever it eventually lists.
IT exposure increased, but caution remains
Sohum Asset Managers has raised exposure to IT stocks following the recent correction, adding to Coforge and Infosys.
“We did add, but we have not added with full conviction going to equal weight. We still didn’t have the courage to go equal weight or overweight because still we believe that growth is a challenge. Growth rates will be subdued, and you don’t have a visibility on very long term. We have cut our underweight quite well, but we are still underweight,” he added.
Banking positions increased
One of the biggest portfolio changes over the past month has been increasing exposure to large private banks.
Parekh said the fund has added to both Axis Bank and HDFC Bank as their recent underperformance has created attractive valuations. He described the move as a contrarian bet, noting that investors are focusing too much on short-term concerns.
“I have never seen HDFC Bank so cheap.”
Autos remain a key conviction
Parekh continues to favour the automobile sector, with Maruti Suzuki and Mahindra & Mahindra among the fund’s largest holdings.
He believes Mahindra remains undervalued despite its recent rally, while Maruti’s margin pressure is likely to ease as price hikes and favourable raw material costs begin to reflect in earnings.
According to Parekh, healthy vehicle demand and improving profitability should support both companies over the medium term, making them important long-term holdings in the portfolio.
Vedanta remains preferred metals play
Within the metals space, the fund has consolidated its exposure around Vedanta Aluminium and Vedanta Ltd instead of holding individual demerged businesses.
Parekh believes aluminium, zinc and silver continue to offer attractive long-term opportunities. While he sees value in the oil and gas business, he said the iron and steel business still has significant execution challenges despite its long-term potential.
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