'Invest in cyclicals with a price target in mind'

Summary: Rohit Singhania of DSP Mutual Fund believes the market is in a healthy consolidation, not a bear phase. He highlights financials, telecom and select energy PSUs as attractive, and stresses disciplined position sizing and clear price targets when investing in cyclicals like metals and oil marketing companies. Markets have entered a phase of consolidation after a strong rally, with sharp stock-level corrections. Yet, DSP Mutual Fund’s Rohit Singhania believes it is more of a healthy time correction than a structural bear market, drawing comfort from improving earnings visibility, easing downgrades and pockets of positive surprises across sectors. Singhania, Co-Head of Equities at the fund house, manages schemes such as DSP Dynamic Asset Allocation, DSP ELSS Tax Saver and DSP India T.I.G.E.R. Fund. With over two decades of experience, he joined DSP in 2005 after a stint with HDFC Securities. In this interview, Singhania also shares which segments he finds attractive today, the strong performance of the large & midcap and small-cap funds, how he analyses oil marketing companies and the factors expected to drive India’s natural resources in the coming years. After the strong rally of the last few years, markets are now moving sideways with sharp stock-level corrections. What would convince you that this is just a healthy consolidation, and what signals would tell you that we have entered a deeper bear phase? I don’t believe we’ve entered a bear phase. If you rewind 12-15 months, corporate earnings were the big question mark. Quarter after quarter, results disappointed, not just within the Nifty 50 but across broader markets. Yet, markets remained elevated. Everyone kept expecting a normalisation that never quite arrived. Fiscal year 2025 earnings weren’t disastrous but were clearly weaker than expected. At the same time, global trade uncertainties and tariff expectations didn’t play out as hoped. So, in my view, the last 15 months represent a healthy time correction rather than a structural bear market. What gives me greater comfort now is the most recent quarterly results. For the first time in many quarters, we are seeing signs of stabilisation. The pace of earnings downgrades has eased, analysts are no longer uniformly negative and across several sectors, earnings have surprised positively, narrowing the gap between e