Bhautik Ambani of Alpha Grep says this is no longer routine geopolitical noise. It’s a serious escalation, and for India the issue is very simple — oil.

• Stay selective, no room for heroics in this market
• Remain cautious on aviation, OMCs, crude-sensitive discretionary plays
• In worst-case scenario, another 5% correction possible from current levels

“This is not the time to be heroic. It’s a time to be selective in sectors,” said Bhautik Ambani, CEO and Associate Director at Alpha Grep, in an interview with Moneycontrol.

He believes energy stocks provide a natural hedge if oil prices remain strong. “Defence continues to have structural visibility. Pharma offers stability when uncertainty rises,” said Ambani, adding that he would remain cautious on aviation, oil marketing companies, and crude-sensitive discretionary plays.

Following the recent geopolitical tensions, he noted that the firm’s proprietary multi-asset framework has already turned more conservative. “Right now, it indicates roughly 25 percent allocation to equities, about 30 percent to gold, and the remaining 45 percent to fixed income. When volatility rises, survival and discipline matter more than chasing returns.”

Do you see a strong possibility of escalating tensions or a war-like situation in the Middle East based on the current developments in the region, even though the situation remains unpredictable, especially considering President Trump’s stance and decision-making style?

I  think we have to acknowledge that this is no longer routine geopolitical noise. It’s a serious escalation, and for India the issue is very simple — oil.

If crude stays elevated for even a few weeks, it hits us immediately through inflation, the rupee, and the current account. We don’t need a prolonged war for this to hurt — sustained high oil itself is enough.

On the Trump factor — unpredictability adds volatility. Sudden decisions, especially around geopolitics or trade, can move markets overnight. But for Indian equities, oil and global liquidity will matter more than personalities over time.

Markets generally tend to price in developments well in advance, as reflected by the recovery of nearly half the losses on March 2. In a worst-case scenario, do you expect another 5 percent correction from current levels?

Yes, that’s very possible.The bounce we’ve seen feels more like a pause than a clear bottom. Markets have reacted to the headlines, but they haven’t fully adjusted to what sustained high oil or continued FII selling could mean.

In phases like this, sentiment and liquidity dominate. If uncertainty persists, markets can easily drift lower before finding stability. That’s just how risk-off environments behave.

Do you believe President Trump is currently the biggest risk factor for equity markets, given his sudden and often unexpected policy decisions?

In the short term, US policy unpredictability is definitely a volatility trigger. For us, that shows up through oil, a stronger dollar, and foreign flows.

But I wouldn’t say that’s the only risk. AI disruption is a serious structural factor as well — especially for India given how large IT is in our index. The market is still figuring out how AI reshapes traditional services models.

So near term, geopolitics is driving volatility. Structurally, AI and global liquidity cycles are equally important.

The impact of the US-Iran tensions was visible across sectors. In this market correction, which sectors or themes would you consider attractive for buying?

This is not the time to be heroic. It’s a time to be selective.

Energy names provide a natural hedge if oil stays strong. Defence continues to have structural visibility. Pharma offers stability when uncertainty rises.

I would be careful with aviation, oil marketing companies, and crude-sensitive discretionary plays — margins get squeezed quickly when oil moves up.

How should investors allocate across asset classes to maintain a balanced and healthy portfolio amid geopolitical tensions such as those in the Middle East?

In this kind of environment, asset allocation matters more than stock picking.

Our proprietary multi-asset framework has already turned more conservative. Right now, it’s indicating roughly 25% in equities, about 30% in gold, and the balance — around 45% — in fixed income.

The higher gold allocation reflects geopolitical and currency uncertainty. Fixed income provides stability and flexibility. Equities are still there, but at a measured level.

When volatility rises, survival and discipline matter more than chasing returns.

Do IT services stocks look attractive for investment following the AI disruption–led correction? Or would it be prudent to wait for clearer evidence of AI’s impact on earnings before investing in the sector?

I would say — be patient.

IT is facing two challenges at the same time: global macro uncertainty and AI reshaping the revenue model. Valuations have corrected meaningfully, especially in large caps, but earnings clarity is still evolving.

Instead of trying to catch the exact bottom, a gradual approach makes more sense — build exposure slowly as companies demonstrate how they are adapting.

Do you see clear visibility of an earnings rebound in the coming quarters? If so, is the expected earnings growth likely to be broad-based or concentrated in a few sectors?

It’s visible — but selective.

Private banks, defence, and parts of manufacturing look relatively steady. But if oil remains elevated, consumption and discretionary sectors may struggle.

For a broad-based rebound, we need oil to stabilise and inflation to remain under control. If that happens, the recovery can widen over the next few quarters. If not, earnings growth will stay concentrated.Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

Courtsey To : Moneycontrol

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Maria Stanly

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