West Asia tensions could keep markets in consolidation phase: Sohum Asset Managers

Tensions in West Asia and the risk of supply-chain disruptions could keep Indian markets in a consolidation phase until there is greater clarity, according to Sanjay Parekh, Founder & CIO of Sohum Asset Managers, which manages assets worth over ₹172 crore.

Against this backdrop, Parekh said his fund has shifted its portfolio towards large-cap market leaders, with Bharti Airtel remaining one of its highest-conviction holdings.

Parekh said Bharti Airtel offers long-term growth beyond mobile services through businesses such as cloud services, Reliance Industries and digital lending. He expects these businesses to create value over the next two to three years, while also maintaining a positive long-term view on Mahindra and Mahindra

.

He said crude oil prices of $80-85 per barrel remain manageable, but supply-chain disruptions from prolonged geopolitical tensions pose a bigger risk.

The fund's portfolio includes Maruti Suzuki (M&M), Adani Ports, Grasim, Bharti Airtel, Reliance Industries, Sun Pharma, Infosys, Coforge, DLF, Lodha Developers and a recent investment in Dixon Technologies. Parekh said the fund increased its allocation to IT during the recent correction by adding Coforge and raising exposure to Infosys.

Parekh said Grasim's renewable energy acquisition appears reasonably valued at about 8.5-9 times EV/EBITDA based on his estimates. He expects the renewable platform to start making a meaningful earnings contribution over the next 12-18 months once capacity ramps up.

While he sees long-term value creation potential from Grasim's paints and renewable businesses, he said the renewable business is still in its investment phase and should be valued after it begins contributing meaningfully to earnings.

Discussing telecom, Parekh said Bharti Airtel remains his preferred investment in the sector despite uncertainty over tariff hikes.

"The business will look far different in two to three years, where the downstream businesses will have significant value creation."

He said the upcoming Jio initial public offering (IPO) could provide a marginal valuation boost for Reliance Industries, although the company's long-term fundamentals remain the bigger driver.

Parekh said the SBI Mutual Fund IPO issue is attractively priced at a discount to listed peers and could deliver 10-15% listing gains. He added that India's asset management industry has a long growth runway, making the business an attractive long-term opportunity.

Parekh also revisited the electronics manufacturing services (EMS) sector, saying Dixon Technologies remains on his watchlist despite valuation concerns. He believes the company has a strong growth opportunity as it expands beyond mobile manufacturing.

Parekh said Sohum Asset Managers continues to favour large-cap stocks while selectively evaluating bottom-up opportunities in renewable energy, digital businesses and select mid- and small-cap companies where valuations offer an attractive risk-reward balance.

For the full interview, watch the accompanying video

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Disclosure: Reliance Industries Ltd, which owns Jio, is the sole beneficiary of Independent Media Trust that controls Network18, the parent company of CNBCTV18.com.