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ICICI Prudential AMC favors value over growth, says IT impact unclear
The fund manager pointed to 12% to 13% year over year aggregate Nifty 500 earnings growth in Q1FY27, while warning that AI could alter traditional IT services pricing over time.
ICICI Prudential AMC equities head Chockalingam Narayanan said the current market setup calls for favoring value over growth and focusing on current earnings rather than distant earnings. He also emphasized preferring asset-heavy businesses over asset-light models in a differentiating environment for stock selection, according to an interview published by LiveMint Markets.
Narayanan said IT stocks are not an outright contra bet, because it remains to be seen how their business models adapt to AI. He flagged AI as a near-term concern for traditional IT services, noting that automation could pressure pricing and, over time, terminal growth assumptions for some companies.
On market flows and India’s broader story, he said foreign institutional investor selling should not be viewed as rejecting India’s structural outlook, describing it instead as tied to asset allocation, currency considerations, and relative valuation. He also argued that higher oil prices may change the composition of earnings growth rather than uniformly boost it across the market.
In discussing earnings dispersion, Narayanan cited double-digit earnings growth of 12% to 13% year over year at the aggregate Nifty 500 level in Q1FY27, while saying deeper analysis shows clear winners and losers. He said commodity producers, such as metals producers, tend to benefit from higher commodity prices, while commodity consumers like autos and other input-intensive businesses can face margin pressure, making balance sheets, resilient earnings, and pricing power more important.