Ashwini Agarwal says worst of market correction is over, but full recovery uncertain

Ashwini Agarwal, Founder & Partner at Demeter Advisors, believes the “bulk of the (market) damage is done.” While a near-term rebound is possible, the market’s long-term bottom remains uncertain due to the shifting policy environment.He pointed out that, historically, market corrections have lasted 12 to 18 months, with most significant declines occurring in the first six months.

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A key factor to watch is the impact of initial public offering (IPO) lock-in expiries. As these periods end, many investors may sell to book profits, potentially creating buying opportunities if the stock prices become attractive.
Agarwal advises focusing on quality companies with reasonable valuations. He suggests looking for opportunities in shares trading at around 10 to 20 times earnings.He is particularly optimistic about the domestic consumer and financial sectors, where companies with solid balance sheets and stable cash flows are showing promise.

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On the other hand, he remains cautious about the export and apparel sectors. Despite past successes, uncertainties such as currency fluctuations, tariffs, and changing US demand continue to pose risks. However, Agarwal believes that with the right policy measures, Indian apparel could reap long-term benefits.

For the full interview, watch the accompanying video

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