Which sectors look attractive after the market correction? Pranav Haridasan of Axis Securities explains
Pranav Haridasan, MD and CEO of Axis Securities, explains what is driving the recent market swings, where valuations look attractive after the correction, and sectors to focus on
- Apr 8, 2026,
- Updated Apr 8, 2026 3:29 PM IST
Markets have been on a roller coaster ride in recent months, with sharp corrections, foreign investor outflows, and rising global tensions unsettling investors. While valuations in several segments had run ahead of fundamentals, external pressures such as higher crude prices, a strong dollar and geopolitical risks have added to the volatility.
In this conversation with BT, Pranav Haridasan, Managing Director and CEO of Axis Securities, explains what is really driving the recent swings in the market. He shares his views on FII outflows, where valuations now look attractive after the correction, which sectors offer better opportunities, and what triggers could spark the next rally in Indian equities. He also discusses how global tensions and crude prices could shape India’s macro-outlook and what simple strategy retail investors should follow in the current environment. Q). Markets have been volatile in recent months. Do you see this as a healthy correction or a sign of deeper weakness in equities?
Pranav Haridasan: There are two forces at work. The first is a necessary recalibration, particularly in mid and small caps, where valuations had run well ahead of earnings. The second is external, a global environment of elevated US rates, a strong dollar, and geopolitical uncertainty that has amplified the correction beyond what fundamentals alone would have produced. Both are real, and neither has fully resolved. What gives me comfort is that India's domestic fundamentals are in better shape than they were in previous down cycles. Corporate balance sheets are cleaner, the banking system is healthier, and fiscal management has been more disciplined. When external headwinds ease, that underlying quality will reassert itself.
ALSO READ: 2 IT stocks to buy for 25-26% upside; target for TCS ahead of Q4 results
Q). Foreign investors have been pulling money out of Indian markets quite sharply. What is driving these flows right now, and should retail investors be worried about sudden FII outflows?
Haridasan: This is a global portfolio reallocation story, not a verdict on India. When US Treasuries yield over 4.5% in a strong dollar environment, emerging market exposure gets trimmed as a matter of course. India has been caught in that sweep. What is more interesting is the shift happening in how global allocators think about India. As geopolitics reshapes capital flows and supply chains, India is increasingly seen not as an opportunistic trade but as a must-have allocation, a large, stable, rule-of-law economy with a credible long-term growth story. That re-rating is still in early stages and represents a significant tailwind once near-term macro conditions settle. The reversal, when it comes, tends to be swift. Investors who stay the course are far better placed than those who try to time it.
Q). Large-cap stocks have underperformed, while mid- and small-caps have also seen sharp declines. Where should retail investors focus now for better risk-reward?
Haridasan: Large caps are offering better entry points than they have in some time. Valuations have corrected, earnings are more visible, and these businesses have the strength to navigate a difficult macro environment. This is where the more dependable risk-reward sits right now. Mid and small caps need a harder look. Not every stock that has fallen 30% to 40% is cheap. Some of that de-rating reflects real earnings risk or excess leverage rather than indiscriminate selling. The work is to distinguish between the two, and that requires looking at fundamentals rather than just price movement.
ALSO READ: Senco Gold shares resume climb, stock jumps 16% in 5 sessions; is this a sign of potential reversal?
Q). After the recent market decline, which sectors are now looking attractive from a valuation and earnings perspective, and where should retail investors consider buying at current levels?
Haridasan: Banking stands out. Valuations are reasonable, credit growth is healthy, asset quality has improved structurally, and the sector is a direct beneficiary of any domestic rate easing cycle. Private sector banks in particular offer a good combination of quality and value at current levels.
Capital goods and infrastructure continue to benefit from sustained government capex, and select auto segments, particularly those with rural exposure, are seeing a demand recovery with real legs.
IT is more nuanced. The correction has improved the entry point, but near-term headwinds are genuine. Western clients remain cautious on tech spending, and AI is beginning to reshape parts of the business in ways the sector is still working through.
There is value here for patient investors with a medium-term view, but it is not a trade for those expecting quick returns. Sectors sensitive to crude, including aviation and oil marketing companies, remain hostage to geopolitical outcomes. The upside is clear if crude settles, but that is not entirely within India's control.
Q). With global uncertainties and FII outflows continuing, what could be the next big trigger for a sustained rally in Indian equity markets?
Haridasan: The two macro conditions that matter most are US rate moderation and crude oil stability. Easing US rates reduces the dollar's pull on global capital and redirects flow toward growth markets, with India typically among the primary beneficiaries. A sustained period of crude stabilisation removes a significant overhang on inflation, the current account, and the RBI's room to act.
Beyond the near-term triggers, there is a structural shift underway in how global investors position India. As geopolitics accelerates supply chain realignment and investors look for large, stable economies to anchor long-duration capital, India's position has strengthened considerably. The re-rating of India as a core allocation rather than a satellite bet is still early, and that is a tailwind that will matter well beyond the next market cycle.
ALSO READ: Multibagger IT stock with 36% profit CAGR falls 25%; buy or sell? - Price targets
Q). How is the ongoing US-Iran conflict reshaping India's macro-outlook, especially in terms of inflation, current account deficit, and market volatility, and which sectors are most at risk if tensions persist?
Haridasan: Crude oil is India's most direct vulnerability. As a large net energy importer, sustained higher crude prices push up inflation, widen the current account deficit, and constrain the RBI's ability to cut rates even when domestic conditions would support it. The rupee comes under pressure too, which feeds through to import costs broadly. On the sectoral side, the businesses most sensitive to input costs feel the strain first, while upstream energy and renewables tend to benefit as energy security becomes a policy priority. But the bigger consequence for India is macro rather than sectoral.
The harder point to make, but worth making, is that India's relative stability in a turbulent world is itself becoming an asset. The same geopolitical environment creating near-term headwinds is also making India a more attractive destination for long-duration global capital. That does not offset the crude risk in the short run, but it shapes the medium-term picture considerably.
ALSO READ: Adani Enterprises, Adani Green, Adani Ports, other group stocks rally up to 13%; here's why Q). Given the current uncertainty around interest rates, the rupee, and global tensions, what simple strategy would you advise retail investors to follow to protect their portfolio and still earn stable returns?
Haridasan: Own your quality and be clear about why you own it. Businesses with pricing power, manageable debt, and earnings that do not depend on one specific macro-outcome will hold up better. This is not the environment to be carrying positions built purely on momentum or narrative.
Fixed income deserves more attention than it usually gets. With rates likely to ease over the medium term, quality bonds and duration-oriented funds offer both income and capital appreciation potential, a combination that makes real sense right now.
And keep perspective on India. The near-term noise is real, but the underlying story, a large, growing economy with improving fundamentals and a strengthening position in global capital flows, remains intact. Investors who have held through difficult periods in India have generally been rewarded for it.
Markets have been on a roller coaster ride in recent months, with sharp corrections, foreign investor outflows, and rising global tensions unsettling investors. While valuations in several segments had run ahead of fundamentals, external pressures such as higher crude prices, a strong dollar and geopolitical risks have added to the volatility.
In this conversation with BT, Pranav Haridasan, Managing Director and CEO of Axis Securities, explains what is really driving the recent swings in the market. He shares his views on FII outflows, where valuations now look attractive after the correction, which sectors offer better opportunities, and what triggers could spark the next rally in Indian equities. He also discusses how global tensions and crude prices could shape India’s macro-outlook and what simple strategy retail investors should follow in the current environment. Q). Markets have been volatile in recent months. Do you see this as a healthy correction or a sign of deeper weakness in equities?
Pranav Haridasan: There are two forces at work. The first is a necessary recalibration, particularly in mid and small caps, where valuations had run well ahead of earnings. The second is external, a global environment of elevated US rates, a strong dollar, and geopolitical uncertainty that has amplified the correction beyond what fundamentals alone would have produced. Both are real, and neither has fully resolved. What gives me comfort is that India's domestic fundamentals are in better shape than they were in previous down cycles. Corporate balance sheets are cleaner, the banking system is healthier, and fiscal management has been more disciplined. When external headwinds ease, that underlying quality will reassert itself.
ALSO READ: 2 IT stocks to buy for 25-26% upside; target for TCS ahead of Q4 results
Q). Foreign investors have been pulling money out of Indian markets quite sharply. What is driving these flows right now, and should retail investors be worried about sudden FII outflows?
Haridasan: This is a global portfolio reallocation story, not a verdict on India. When US Treasuries yield over 4.5% in a strong dollar environment, emerging market exposure gets trimmed as a matter of course. India has been caught in that sweep. What is more interesting is the shift happening in how global allocators think about India. As geopolitics reshapes capital flows and supply chains, India is increasingly seen not as an opportunistic trade but as a must-have allocation, a large, stable, rule-of-law economy with a credible long-term growth story. That re-rating is still in early stages and represents a significant tailwind once near-term macro conditions settle. The reversal, when it comes, tends to be swift. Investors who stay the course are far better placed than those who try to time it.
Q). Large-cap stocks have underperformed, while mid- and small-caps have also seen sharp declines. Where should retail investors focus now for better risk-reward?
Haridasan: Large caps are offering better entry points than they have in some time. Valuations have corrected, earnings are more visible, and these businesses have the strength to navigate a difficult macro environment. This is where the more dependable risk-reward sits right now. Mid and small caps need a harder look. Not every stock that has fallen 30% to 40% is cheap. Some of that de-rating reflects real earnings risk or excess leverage rather than indiscriminate selling. The work is to distinguish between the two, and that requires looking at fundamentals rather than just price movement.
ALSO READ: Senco Gold shares resume climb, stock jumps 16% in 5 sessions; is this a sign of potential reversal?
Q). After the recent market decline, which sectors are now looking attractive from a valuation and earnings perspective, and where should retail investors consider buying at current levels?
Haridasan: Banking stands out. Valuations are reasonable, credit growth is healthy, asset quality has improved structurally, and the sector is a direct beneficiary of any domestic rate easing cycle. Private sector banks in particular offer a good combination of quality and value at current levels.
Capital goods and infrastructure continue to benefit from sustained government capex, and select auto segments, particularly those with rural exposure, are seeing a demand recovery with real legs.
IT is more nuanced. The correction has improved the entry point, but near-term headwinds are genuine. Western clients remain cautious on tech spending, and AI is beginning to reshape parts of the business in ways the sector is still working through.
There is value here for patient investors with a medium-term view, but it is not a trade for those expecting quick returns. Sectors sensitive to crude, including aviation and oil marketing companies, remain hostage to geopolitical outcomes. The upside is clear if crude settles, but that is not entirely within India's control.
Q). With global uncertainties and FII outflows continuing, what could be the next big trigger for a sustained rally in Indian equity markets?
Haridasan: The two macro conditions that matter most are US rate moderation and crude oil stability. Easing US rates reduces the dollar's pull on global capital and redirects flow toward growth markets, with India typically among the primary beneficiaries. A sustained period of crude stabilisation removes a significant overhang on inflation, the current account, and the RBI's room to act.
Beyond the near-term triggers, there is a structural shift underway in how global investors position India. As geopolitics accelerates supply chain realignment and investors look for large, stable economies to anchor long-duration capital, India's position has strengthened considerably. The re-rating of India as a core allocation rather than a satellite bet is still early, and that is a tailwind that will matter well beyond the next market cycle.
ALSO READ: Multibagger IT stock with 36% profit CAGR falls 25%; buy or sell? - Price targets
Q). How is the ongoing US-Iran conflict reshaping India's macro-outlook, especially in terms of inflation, current account deficit, and market volatility, and which sectors are most at risk if tensions persist?
Haridasan: Crude oil is India's most direct vulnerability. As a large net energy importer, sustained higher crude prices push up inflation, widen the current account deficit, and constrain the RBI's ability to cut rates even when domestic conditions would support it. The rupee comes under pressure too, which feeds through to import costs broadly. On the sectoral side, the businesses most sensitive to input costs feel the strain first, while upstream energy and renewables tend to benefit as energy security becomes a policy priority. But the bigger consequence for India is macro rather than sectoral.
The harder point to make, but worth making, is that India's relative stability in a turbulent world is itself becoming an asset. The same geopolitical environment creating near-term headwinds is also making India a more attractive destination for long-duration global capital. That does not offset the crude risk in the short run, but it shapes the medium-term picture considerably.
ALSO READ: Adani Enterprises, Adani Green, Adani Ports, other group stocks rally up to 13%; here's why Q). Given the current uncertainty around interest rates, the rupee, and global tensions, what simple strategy would you advise retail investors to follow to protect their portfolio and still earn stable returns?
Haridasan: Own your quality and be clear about why you own it. Businesses with pricing power, manageable debt, and earnings that do not depend on one specific macro-outcome will hold up better. This is not the environment to be carrying positions built purely on momentum or narrative.
Fixed income deserves more attention than it usually gets. With rates likely to ease over the medium term, quality bonds and duration-oriented funds offer both income and capital appreciation potential, a combination that makes real sense right now.
And keep perspective on India. The near-term noise is real, but the underlying story, a large, growing economy with improving fundamentals and a strengthening position in global capital flows, remains intact. Investors who have held through difficult periods in India have generally been rewarded for it.