JPMorgan's Mookim sees value in large banks; renewables, defence draw interest amid volatility

Sanjay Mookim, Head of India Equity Research, JPMorgan, said rising input costs and supply constraints are affecting smaller businesses, with some reporting production disruptions. Import costs have increased due to premiums over global benchmarks. While earnings downgrades are expected, valuations are moving closer to long-term levels, with select sectors drawing investor interest amid uncertainty.

Sanjay Mookim, Head of India Equity Research, JPMorgan, said large banks and financials are emerging as a key area of focus for investors with a medium-term view, even as near-term risks remain.

He said valuations in the sector are now more reasonable after recent pressure and added that these multiples look reasonably attractive. He noted that while macro conditions could weigh on the sector in the short term, downside from current levels may be limited.

Mookim said the opportunity is more suited for investors with a longer horizon. He said, for a three-year medium-term view, the valuations or the entry points one is getting today are very attractive.

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He cautioned that the broader market does not offer similar comfort, with consumer and discretionary stocks still not at levels that would signal deep value.

On sector trends, he said power, IT and healthcare are seeing interest as relatively stable plays during market volatility, though not necessarily driven by earnings upgrades.

Mookim also pointed to global investment trends emerging from recent geopolitical developments. He said that most countries globally will look to increase investments in defence and renewable energy, as economies try to reduce dependence on imported fuels.

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On oil and gas stocks, he advised caution due to uncertainty in crude prices, currency movement and policy decisions. He said it is very difficult to take calls in the sector at this stage, given multiple moving factors, including potential changes in fuel pricing and taxes.

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(Edited by : Unnikrishnan )