Tandon said the past week had been hectic for markets but noted a visible shift in sentiment. “There is a smile on most faces now—some sense of relief,” he said, pointing to progress on India-US trade deal, clarity on Europe, and a slight appreciation in the rupee.
According to him, selling pressure appears to have peaked. “The worst seems to be behind us. We have seen selling exhaustion,” Tandon said, adding that current data points are constructive enough to warrant a more positive stance on Indian equities.Global Pain, India’s Gain
Tandon reiterated that his key concern at the start of the year was not India, but global equities—and that risk is now playing out. “This year was always going to be very challenging for global equities,” he said.
What stands out this time, he argues, is India’s relative resilience. “India has showcased the signs of outperformance,” Tandon said, adding that this trend should continue both versus developed markets and emerging markets.
He expects capital flows to increasingly favour India if regional markets such as Korea, Taiwan, and China see deeper damage. “The more damage you see in the region, the more money will shift to India. If global markets correct sharply, we should be beneficiaries rather than people getting worried,” he said.
Relative Outperformance First, Absolute Gains Next
Tandon noted that Indian markets had underperformed on a relative basis for the last six quarters, but that trend is now reversing. “On a relative basis, things are looking better, and with a lag effect, things will start looking good from an absolute perspective as well,” he said.
AI Hype vs Reality: Cautious on Global Tech, Selective on Indian IT
While maintaining caution on global technology stocks amid what he described as hype and exuberance around AI, Tandon said it would be premature to write off Indian IT services companies.
Quant Mutual Fund has reduced exposure to global tech since January but sees potential opportunities ahead. “Indian IT services firms are trading in the neglected zone,” he said.
Tandon believes Indian IT could benefit with a lag if global tech-heavy markets such as the US, Taiwan, and Korea continue to correct. However, he made it clear that the fund is not bottom-fishing yet. “Let them correct some more, and then we would like to evaluate,” he said.Big Portfolio Shift: Private Banks Take Centre Stage
One of the most notable changes in Quant MF’s portfolio is a decisive tilt towards private sector banks. “For a change, we currently have a very large exposure to private sector banks,” Tandon said, adding that the fund has cut PSU bank exposure significantly.
“This is the first time we have been grossly overweight in the financial space,” he noted.
Insurance, AMCs Among Preferred Bets
Tandon also remains constructive on insurance companies, calling the sector a “sunrise industry” despite recent corrections in some stocks. “A lot of headwinds are settling down,” he said, adding that the fund prefers large-cap, liquid companies with quality management.
In addition, Quant MF has increased exposure to asset management companies. “That’s an area where we see continuous growth. Some new companies are also getting listed,” Tandon said.
Defence Stocks: Long-Term Bullish, Short-Term Cautious
On defence stocks, Tandon struck a note of caution despite a strong long-term outlook. “Valuations are pretty overstretched. Most of the names are grossly overvalued,” he said.
He added that a 10–15% correction would not be meaningful enough to make the sector attractive again. “Valuations have to come back to respectable levels for us to participate,” Tandon said, adopting a wait-and-watch approach for now.
Also Read | India’s valuation premium narrows as AI-led rally lifts global peers
Bottom Line
Tandon’s message is clear: global volatility may persist, but India stands out as a relative safe haven. With selling pressure easing, capital flows likely to shift towards India, and selective opportunities emerging across banks, insurance, and IT, he believes investors should remain constructive—but disciplined—in their approach.
“If global markets weaken from here, India could actually win,” Tandon said.
Watch accompanying video for entire conversation.
