Market veteran Sandip Sabharwal of asksandipsabharwal.com sees select private banks as the most compelling buy right now, calls IT stocks "extremely oversold," and warns Indian investors to worry less about the SpaceX IPO and more about loss-making domestic companies commanding sky-high valuations.
Talking to ET Now, Sabharwal says: "Banks are cheap and they are well placed. From the private banking side, Axis and ICICI I would say."
Banks: The FCNR(B) catalyst most are missing
Sabharwal argues that the market is underappreciating the impact of FCNR(B) deposit schemes. If roughly ₹5 lakh crore in additional deposits flows into the banking system, it directly addresses the deposit-growth concern that has weighed on lenders for months. He favours Axis Bank and ICICI Bank among private players, and notes that HDFC Bank and SBI also look "decently placed" at current valuations.
IT: Technically sold out, 12–15% upside possible
Top-tier IT services stocks have corrected sharply, and Sabharwal believes the sector is "under-owned." While near-term growth pressure from AI disruption is real, the cash-flow generation of these companies still justifies higher valuations. He puts potential upside at 12–15% from current levels, with limited downside.
IT upside target
12–15%
FCNR(B) deposits
₹5 lakh crore
Disinvestment target
₹70,000–80,000 crore
Telecom, power & the Zepto warning
In telecom, Sabharwal has one clear choice: Bharti Airtel. He dismisses Vodafone as structurally incapable of sustained profitability. On the power side, he flags GE Vernova, Hitachi, Cummins, and transformer and wire-and-cable companies as interesting plays, but warns their valuations are stretched and better entry points come during market selloffs.
His sharpest caution is reserved for Zepto, which filed its DRHP at a ~₹73,000 crore ($7 billion) valuation. He questions whether there is any credible pathway to profitability and draws a broader lesson: Indian investors should be far more concerned about richly priced domestic loss-makers than about overseas mega-IPOs like SpaceX drawing liquidity away from Indian markets.
Key takeaways
- Axis Bank and ICICI Bank are Sabharwal's top picks in banking
- IT sector is oversold; 12–15% upside likely from current levels
- Bharti Airtel is the only investable telecom stock; Vodafone structurally challenged
- Zepto IPO raises red flags — no clear profitability path at $7B valuation
