Autos, hospitals, midcaps: Rajesh Kothari’s roadmap for long-term investors

About this update from Kothari Petrochemicals Ltd.

Rajesh Kothari, Managing Director of AlfAccurate Advisors identifies pockets of opportunity: auto remains a favourite, consumer discretionary is now interesting after a correction, and hospitals have also corrected to more reasonable valuations. He reiterates that zero-to-thousand companies (the right companies) are where big alpha is likely to be created over medium to long term. Among sectors, automobiles remain a key focus. “Most of these stocks have delivered extremely good returns despite this kind of market.” Consumer discretionary is another area he is beginning to track closely, expecting a revival in demand. Hospitals also stand out, as large capacity expansion over the last few years is expected to translate into stronger earnings ahead, even as valuations have become more reasonable.Read Here | Correction done, stock picking begins: TCG Asset’s take on Indian equities He also prefers auto ancillary companies, which benefit from higher content per vehicle due to premiumisation, safety features, and electronics, while being better protected from commodity price volatility than original equipment manufacturers. Manufacturing remains a long-term theme for Kothari, with opportunities across auto ancillaries, capital goods, defence, and aerospace. He believes fears around global competition, particularly from China, are often overstated. Strong order books, rising demand from data centres, grid stability requirements, and AI-led infrastructure spending provide a multi-year growth runway for select capital goods companies Indian equity markets have seen sharp volatility in recent weeks, especially in the mid- and small-cap space, as global and domestic uncertainties weigh on investor sentiment. Kothari, believes the current phase of fear-driven selling is creating long-term opportunities rather than reasons to panic. According to Kothari, uncertainty around global trade developments and delays in key decisions have led investors to postpone buying, resulting in heightened volatility. However, he says such phases have historically rewarded patient investors. He points out that markets often look uncomfortable in the short term, but over a two- to three-year period, buying during fearful phases has typically generated better-than-average returns.

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