Sanjay H Parekh Makes Bold Investment Moves in Reliance, Private Banks, and Domestic Stocks Amid Global Economic Turmoil.

As global macro challenges mount with increasing pressure on mid and small-cap stocks, Sohum Asset Managers is strategically reallocating toward large-cap securities to ensure portfolio resilience. Founder and Chief Investment Officer Sanjay H Parekh articulated a significant pivot during a recent discussion with ET Now, revealing an allocation that has risen to 82% in large-caps, exceeding their minimum mandate of 70%. This adjustment, made over the past few months, underscores a clear investment strategy prioritizing domestic stability in light of persistent geopolitical tensions, which has positioned India-facing businesses to outperform their globally exposed counterparts.

Central to Sohum’s strategy is a strong conviction in Reliance Industries, identified as a flagship holding after purchases at ₹1,350–1,360. Parekh’s analysis suggests a fair value range of ₹1,660–1,670 by FY28, stemming from robust cash flows across its refining, petrochemical, and telecom segments, alongside a promising new energy initiative. The fund’s confidence in Reliance arises from its solid financial fundamentals and promising growth trajectories, which Parekh anticipates will significantly contribute to the company’s earnings over the next few years, creating substantial upside potential for investors.

In addition to its commanding position in financials—holding stocks in leading private sector banks that constitute 26% of the portfolio—Sohum is focusing on domestic consumption and infrastructure sectors. Parekh highlights the performance of auto companies such as Maruti and Mahindra, as well as cement players like Ambuja and Grasim, aligning with a fundamental belief in market consolidation amid overcapacity. Conversely, the fund has opted to bypass the FMCG sector despite its current popularity, wary of elevated valuations compared to growth prospects. This disciplined approach to growth-at-a-reasonable-price (GARP) investing has yielded an impressive annual compounded return of 18% over the last four years, demonstrating an effective concentration on high-conviction names within the portfolio.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)