Choksey says this has created a disconnect between stock prices and business fundamentals. While markets look weak on technical charts, underlying business conditions in India remain “extraordinarily robust”. Corporate earnings are strong and operating performance across sectors continues to be healthy.
However, currency-related volatility and global uncertainty have resulted in what he calls “collateral damage” for Indian equities. In such an environment, he stresses that patience is critical and investors should stay invested in quality companies rather than react to short-term market noise.Read Here | Market stress is rising; Marketsmith’s Mayuresh Joshi advises selective stock picks
Choksey believes mid-tier IT companies are currently under pressure mainly due to elevated valuations, a trend that also applies to names like Persistent Systems. He sees no issues with business fundamentals or earnings performance, and notes that these companies continue to offer reasonable visibility on future growth. However, rich valuations make them less attractive at present.According to Choksey, a similar situation is playing out across other retail-focused IT companies. The ongoing correction in the sector is largely valuation-driven and could persist for some time, as significant re-rating over the past two to three years now needs to be absorbed through a phase of time correction, along with some price adjustment.
The same logic applies to other sectors where valuations were stretched. In consumer and alcohol stocks, including United Spirits, Choksey notes that even minor disappointments in earnings can trigger sharp de-rating. When stocks are priced for perfection, any uncertainty — whether related to taxes, duties, or policy fears — can lead to sustained pressure.
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