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Investment strategy - Markets after the current conflict

ICICIdirect Research 13 Mar 2026 DISCLAIMER

Geopolitical events like the current conflict often create strong buying opportunities from a 2 to 3 year perspective. Investors can deploy capital based on risk appetite either through lump sum investments or in a staggered manner to manage near term volatility.

From an earnings and valuation standpoint, India is expected to deliver 10 to 15% PAT CAGR between FY25 and FY28E. The lower end assumes crude prices remain elevated for some time. At present, broader markets are trading at 17.5x FY28E EPS.

Given the uncertainty, preference should be for domestic focused sectors such as banks, infrastructure, capital goods, cement, auto including OEM and ancillaries with low export exposure, real estate, and discretionary consumption.
Near term pressure may continue in sectors like oil marketing companies, aviation, paints, and fertilisers, though these sectors could rebound sharply once the situation stabilizes.

Market trend suggests that the lack of follow through buying has extended the correction. The Nifty has already corrected about 8% in the last two weeks. A 11 to 12% correction could take the index closer to 22,200 levels. For a meaningful recovery, the index needs to close decisively above 24,400.

Key factors to monitor

• De escalation of geopolitical tensions
• Cooling of crude oil prices
• Outcome of the United States Federal Reserve meeting

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