Ace investor Vijay Kedia on Monday has cautioned investors to brace for a potential 20–25% correction in the markets amid heightened geopolitical uncertainty and rising oil prices, while advising a long-term investment approach. He also is bullish on the infrastructure and PSU sectors, while cautious of IT and defence.
“Be prepared to see a dip of 20–25%,” Kedia told NDTV Profit in an exclusive interview. He also urged investors to remain patient during the current phase of market turbulence. He advised investors not to attempt to perfectly time the bottom of the market, noting that it is wiser to wait for conditions to stabilise before making fresh investments.
“There is no need to catch the exact bottom of the market. Let the market stabilise,” he told NDTV Profit.
Kedia said the recent volatility in equity markets is largely being driven by the surge in crude oil prices and uncertainty stemming from the ongoing geopolitical conflict, which has weighed heavily on investor sentiment.
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The surge in oil prices, triggered by escalating geopolitical tensions and concerns about supply disruptions, has increased fears of higher inflation and slower economic growth globally, he noted. In addition, uncertainty linked to the ongoing war has intensified volatility across financial markets, prompting investors to adopt a risk-off stance.
Kedia emphasised that investors should adopt a longer investment horizon in the current environment. According to him, maintaining a three to four-year perspective can help investors navigate short-term volatility and benefit from the structural growth story of the Indian economy.
He also cautioned against speculative investing. “Don't try to be adventurous. If you understand a company well, only then buy it,” he said, stressing on the importance of fundamental research and disciplined investing.
On sectoral preferences, Kedia expressed caution on information technology stocks, indicating that he would avoid making fresh bets in the IT sector at current levels.
He also noted that defence stocks appear expensive at present, although the long-term growth prospects for the sector remain intact due to increasing defence spending and the government's focus on domestic manufacturing.
Meanwhile, segments linked to emerging technologies such as artificial intelligence and semiconductors are currently trading at elevated valuations. According to Kedia, the excitement surrounding artificial intelligence could see some cooling in the future.
“The AI bubble may settle down,” he said, suggesting that valuations in the segment may moderate over time.
Opportunities In Startups And Broader Markets
Kedia sees opportunities in the startup ecosystem, particularly in technology-driven companies.
He believes technology-focused startups could deliver strong growth as digital adoption and innovation continue to accelerate across industries.
At the same time, he pointed out that valuations across the broader markets have become relatively cheaper following the recent correction.
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Preferred sectors: Infrastructure and PSUs
Among listed sectors, Kedia remains constructive on infrastructure and public sector undertakings (PSUs). The segments stand to benefit from the government's continued focus on capital expenditure, infrastructure development and strategic reforms.
Be Selective In The Bull Market
While acknowledging that India remains in a broader bull market cycle, Kedia said investors need to be far more selective at current levels.
“Bull markets are like sunshine,” he remarked, implying that favourable conditions eventually return but investors must choose their investments carefully.
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