Waterfield Says Market Fears Ease, Buy in Phases

A ₹5 lakh stock portfolio does not need a crash to hurt. Even a 2 percent slide quietly removes ₹10,000.

That is why the current market debate matters. Investors are not asking whether India is still a good long-term story. They are asking whether this is the right time to buy, wait, or protect cash.

Vipul Bhowar, senior director and head of equities at Waterfield Advisors, believes the worst of the macro panic may have passed. But he is not calling for a blind rush into every stock on Dalal Street.

Relief rally may not lift all boats

Bhowar expects markets to cheer any cooling of the US-Iran conflict. His point is simple. Markets dislike uncertainty more than bad news that they can measure.

If oil prices calm down, India gets breathing room. Freight costs ease. Import bills look less scary. Inflation pressure weakens. That gives the RBI more room to think about rate cuts.

For a retail investor, that could mean better market sentiment. The Bombay Stock Exchange’s Sensex and the National Stock Exchange’s Nifty 50 usually respond quickly when fear reduces.

But Bhowar also draws a clear line. A relief rally is not the same as a durable bull run. For that, companies must show better profits, stronger demand, and healthier margins.

In plain English, the market may first rise because fear fades. After that, it will ask a harder question. Are companies actually earning enough to justify their share prices?

Oil still decides the mood

Crude oil remains the quiet villain in this story. India imports most of the oil it uses. So every spike hits the economy in several places.

Paint companies pay more for inputs. Tyre makers face cost pressure. Chemical firms feel the pinch. FMCG companies also suffer because packaging and transport become costlier.

That pressure does not always show up immediately on a grocery bill. But it slowly travels through the system.

A family may first notice petrol getting expensive. Then delivery charges rise. Then soap, shampoo, snacks, or household goods become dearer. After that, discretionary buying slows.

This matters for markets because consumption drives many listed companies. If households delay buying two-wheelers, appliances, or furniture, corporate earnings lose steam.

Bhowar also points to another risk. If the government cuts fuel taxes to ease public anger, it loses revenue. That can widen the fiscal deficit.

A wider deficit means the government may need to borrow more. Higher borrowing can push bond yields up. That can make money costlier for businesses.

So oil does not hurt only oil marketing companies. It can weaken margins, delay rate cuts, reduce demand, and lower market valuations.

Staggered buying beats heroic timing

Bhowar’s advice is not to hunt for the absolute bottom. He favours staggered accumulation, which simply means buying in parts over time.

That is a sensible message for ordinary investors. Very few people can catch the lowest point. Most only recognise it months later.

If someone wants to invest ₹1 lakh, they need not put it all in one day. They can split it across a few weeks or months. This reduces the risk of bad timing.

Bhowar says the best returns often come when markets move from fear to stability. By the time everything looks safe, prices may already reflect that comfort.

But this does not mean buying weak companies just because they look cheap. His focus is on market leaders with strong balance sheets, pricing power, and steady margins.

That distinction matters. A fallen stock is not always a bargain. Sometimes it is just a business with deeper trouble.

For investors, the sharper question is not, “Has the price fallen?” It is, “Can this company earn better when conditions improve?”

Banks face a quieter squeeze

Banks usually act as a proxy for economic growth. When India grows, loan demand rises. That normally helps bank earnings.

Yet Bhowar believes banks may underperform or move sideways over the medium term. The reason lies inside their profit engine.

In recent quarters, banks benefited from low bad loans and provision write-backs. Provision write-backs happen when money kept aside for risky loans returns to profit.

That support may now fade. At the same time, banks face a tough fight for deposits.

Households are putting more money into mutual funds, stocks, and other market products. That leaves banks working harder to attract savings.

When banks pay more to get deposits, their funding cost rises. But when interest rates fall, returns on loans may drop faster.

This squeezes net interest margins. That is the gap between what banks earn on loans and what they pay depositors.

For bank shareholders, this means the easy phase may be over. Strong banks will still matter. But the sector may no longer rise just because credit growth looks decent.

Consumption splits into two Indias

The consumption story now looks uneven. Bhowar favours a barbell approach. That means investing at two ends of the market.

At one end sit premium products. These target higher-income consumers who still spend on better cars, beauty products, travel, fashion, and lifestyle upgrades.

At the other end sit essentials. These include daily-use goods where consumers may switch to cheaper packs but cannot stop buying.

This is where India becomes complicated. A salaried urban professional may still upgrade a phone. A lower-income household may shift to smaller shampoo sachets.

Both are consumption stories. But they belong to different Indias.

Bhowar says companies with strong rural distribution and smart small-pack pricing may benefit. When budgets tighten, people do not always quit brands. They often buy smaller quantities.

That is why investors should avoid treating “consumption” as one neat theme. Premium buyers and mass-market buyers are behaving very differently.

The rupee adds one more layer. Bhowar sees the currency under pressure near the 96 to 97 range against the US dollar, mainly due to high crude and trade worries.

A weaker rupee helps IT and pharma exporters because they earn in dollars. It also helps Indians holding global investments.

But import-heavy manufacturers suffer. A weaker rupee makes imported parts, oil, and machinery costlier. If that feeds inflation, the RBI may keep rates higher for longer.

Bhowar believes the central bank, backed by nearly $700 billion in foreign exchange reserves, will try to prevent a sudden fall. The aim would be gradual weakness, not panic.

For ordinary investors, the message is clear. This is not a market for slogans. It is a market for patience, clean balance sheets, and careful buying. The fear may be easing, but the bill from oil, inflation, deposits, and the rupee has not fully arrived yet.