Growth at reasonable price core focus; underweight banks, IT: Sumit Jain

As markets grapple with heightened volatility driven by geopolitical uncertainty and global macro headwinds, Sumit Jain, Deputy CIO at ASK Investment Managers, says the firm is staying the course with a disciplined focus on quality and growth.

In an interview with ETMarkets, Jain explains why the portfolio remains tilted toward manufacturing, consumption, and healthcare, and why he believes India remains well-positioned to attract FII flows despite short-term global turbulence.

Edited excerpts from a chat:


The mood in the market seems to be swinging in between the two extremes of greed and fear very quickly, depending on the news flow coming in from the White House. How are you handling this period of abnormal volatility? Did you tweak your portfolios well before the meltdown began?

We believe in buying businesses that have secular opportunities and companies that are run by management that can withstand the test of time. Volatility can come with/without any warnings. We have built our portfolios based on such high-quality businesses. As our portfolios are rightly positioned, our need to churn the portfolio has been low. Our portfolios are fairly diversified with a mix of businesses from manufacturing, discretionary consumption, healthcare, NBFCs. We have been underweight in banking and IT.

What’s your current asset allocation mantra? Are you playing defence with value or offence with growth?


We believe defence/offence comes not from the name but the character of the business. India is an equity market oriented towards growth, but growth that is reasonably priced. We believe that, without growth, the so-called value would be a value trap. Only where there is growth there is value creation over the period. Otherwise, they become a one-time value, if at all. We continue to remain growth biased in our investments.

Within your portfolios, are you tweaking cash levels or doubling down on equities on every dip?


We don’t take cash calls. We would like to create an alpha with our stock selection skill set.

If you had to bet your bonus on one sector for FY26, which horse would you be backing and why?


Putting a finger on one sector may not be prudent. India has offered opportunities in multiple sectors in the past and continues to do so even now. With supply chain lines getting redrawn, we believe investment opportunities exist in manufacturing. Domestic consumption, infrastructure investment also offer a good investment opportunity. The entire ecosystem of healthcare, including US generic, domestic pharma, API, CDMO, hospitals, medical consumables, and diagnostics too, offers interesting opportunities at the moment.

One view on the Street is that all export-facing sectors, whether it is IT or pharma, will face trouble in the days ahead. Are consumer stocks the only defensive bet left in the market at this stage?


While the current tariffs have brought about volatility in the environment, we believe opportunities for Indian manufacturing businesses should increase. While domestic businesses are relatively insulated from the global vagaries, even those that are export-facing businesses, where demand is not as much cyclical, that are not as much impacted by global macros, and Indian businesses have the right to win offers good investment opportunities. These could be in areas where R&D plays an important role, eg, healthcare related. IT businesses are linked to the vagaries of global growth, especially the US and growth rates may get impacted.

If the trade war gets limited, by and large, between the US and China, what kind of impact do you see on EM flows? Will India become more attractive for FIIs or will the entire EM basket suffer?


We started seeing redemptions from EMs from October 24, following Trump’s victory. This trend of outflows lasted for about five months, until Feb 25. However, we are now seeing stabilization in flows, though a very short-term trend. Investments in US markets have also suffered. India is one market which is showing promise. We believe that given the strength of the domestic market, and also large part of our growth being domestic driven, we believe the trend of FII outflow from India should recede.

Which is that one data point which matters the most at this stage - bond yields, Q4 earnings or Dow Jones?


While in the short term, markets will keep changing goalposts, we believe that for a durable improvement in the Indian market, the earnings trajectory of Indian markets needs to improve. It is earnings with capital efficiency that have the potential to turn the course.