Capitalmind’s Deepak Shenoy said in a CNBC‑TV18 interview that a 10% correction feels more realistic than a 30% slide, arguing that current valuations have not yet reached the deep value levels seen in the past decade.
The early earnings season, though still sparse, shows a median EPS growth of about 22% among 16‑17 mid‑cap firms that have reported results, while 20 of 250 small‑cap companies have announced earnings, pushing their median growth beyond 30%. Large‑cap firms, by contrast, posted a median rise of roughly 15%.
The rupee has tightened from 96.7 to around 94.95 against the dollar, yet this currency gain has not translated into a market rally, as investor confidence remains low and fund flows are weak.
Banking stocks, which make up the third‑largest allocation in Capitalmind’s flexi‑cap portfolio, show solid fundamentals: deposit growth is double‑digit in smaller lenders, and non‑performing assets are shrinking. Valuations for large banks sit between one and two times book value, while some public and private banks trade at or below one times book.
The IT services sector is poised to benefit from AI adoption later in the cycle. AI‑related revenue currently accounts for 5‑10% of revenue at leading firms but is expected to rise to 20‑25%, creating a new growth window for the segment.
Looking ahead, Shenoy suggests that banks with stronger fundamentals may see market reward over time, and that AI‑service providers will likely capture a larger share of the market as businesses outsource AI implementation and maintenance.