Khemka acknowledged that risks can never be ruled out entirely but emphasised that markets tend to look beyond short-term disruptions.
He pointed out that the impact of past events—such as COVID-19 or the Russia-Ukraine war—was absorbed without widespread financial collapses. “It is hard to make the case that there would be widespread bankruptcies around the world,” he said, adding that markets react more severely when there’s a risk of bankruptcy, not just temporary earnings hits. “Equity shareholders get wiped out in bankruptcy… that is the distinction between a short-term hit and a bankruptcy.”
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Khemka also highlighted the positive role of strong markets in driving capital into productive areas of the real economy. Several companies have raised money over the last few days, and that is very healthy, he said.
He stressed that promoter share sales should be assessed on a case-by-case basis. It may be prudent for promoters to take some off for the sake of family or other purposes, he said, clarifying that not all promoter selling is a negative signal.
In terms of investment opportunities, Khemka continues to favour sectors like financials—especially large-cap banks—along with mid- and small-cap NBFCs, healthcare, IT services, industrials, and consumer names. He also sees growing potential in India’s defence sector. “The events of the last couple of months, particularly the India-Pakistan conflict, merit a much closer look at all defence names,” he said, citing signs of a long-term structural shift in the industry.
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Khemka concluded by reiterating that despite an always-present sense of risk, “we’re not in a particularly elevated environment” compared to the past, and markets are showing resilience in the face of geopolitical tensions.
For the full interview, watch the accompanying video
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