PGIM India’s Chief Investment Officer, Aniruddha Naha, said the firm is holding 15‑20% cash across all strategies, positioning itself to act when the Nifty falls by 5‑7%.
Naha pointed to a mix of global and domestic forces—rising crude prices, stubborn inflation, and widening yields—to justify the high liquidity buffer. He also highlighted sector‑specific inflation in agriculture, metals, and energy, which weigh on India’s consumer demand.
The firm’s trigger is not a blanket market sell‑off but a precise correction range. If the index dips 5‑7%, PGIM will start scouting for opportunities, prioritising mid‑ and small‑cap equities that still offer strong earnings growth relative to their valuations.
Using a bottom‑up approach, PGIM tracks the PEG ratio—price‑to‑earnings divided by earnings growth—to assess whether a price decline makes a stock attractive. A mere price drop is insufficient; the earnings trajectory must also justify the valuation.
Naha flagged capital‑goods as a key sector, noting that companies could fall 30‑35% from peak levels post‑correction. Within this space, electronic manufacturing services, bearings, power transmission, and pumps are seen as likely to rebound.
Healthcare and asset‑management companies also feature on the radar. The former’s recent weakness could unlock upside given its anti‑recession nature, while the latter’s valuations have tightened despite improving earnings, signalling a long‑term financialisation trend.
Insurance is another area where PGIM plans to stay on the sidelines until the sector’s fundamentals recover. The firm’s overarching strategy is to avoid short‑term noise and focus on underlying long‑term value.
In sum, PGIM India is adopting a high‑cash posture to capitalize on a targeted 5‑7% market pullback. The firm will deploy capital selectively, guided by valuation‑earnings metrics and sector dynamics, as the next correction unfolds.