IndiGo as a contra play
Khemani’s boldest call right now is IndiGo. He increased his position in the airline during the recent market fall, citing the company’s status as the lowest-cost market leader in a growing industry. With no meaningful competition expected for the next five years and aircraft supplies lined up, he sees the current dip as a buying opportunity. “If you are getting the stock cheaper for whatever reason and you are happy to take a short-term drawdown, that becomes a very interesting play,” he said.
Power sector: Conventional over renewable
On the power theme, Khemani is bullish but selective. Rather than chasing renewable energy stocks, which he believes suffer from high competitive intensity, he prefers conventional power enablers. Carnelian holds BHEL, which has delivered strong returns over the past two years, and Kalpataru Power, which is active in transmission businesses globally. He sees power demand remaining strong, driven by industrial growth, rising consumption, and the global data center and AI boom.
Banking: Company selection matters more than PSU vs private
Khemani added more PSU bank positions during the market correction, finding attractive risk-reward setups. However, he remains positive on select private banks too, holding ICICI Bank and Federal Bank. His view is clear: the private versus public debate misses the point. Within the same sector, individual stock selection determines returns. He pointed to the very different performance of HDFC Bank, ICICI Bank, and IndusInd Bank as proof that picking the right name matters far more than the category.
No change in market cap mix
Despite the volatile environment, Carnelian has not shifted its portfolio up the market cap curve. Khemani maintains exposure across large and midcaps, arguing that a bad market creates good entry points even in smaller companies. His investment horizon of three to five years means short-term swings do not drive allocation decisions.
What he is avoiding
Khemani was direct about what he steers clear of. He has avoided Zomato parent Eternal despite its wide popularity, saying he does not understand its risk-reward well enough to invest. His broader advice: avoid fads, avoid companies you do not fully understand, and never bet on promoters with questionable quality. He noted that most mistakes in his investing career have come from misjudging management quality, not from getting sector or macro calls wrong.
The EMS basket
On electronics manufacturing services stocks, Khemani said valuations and return profiles have not yet convinced him to invest meaningfully, though he continues to track the space closely.
In summary, Carnelian’s playbook is built on conviction, quality, and patience — buying beaten-down market leaders and avoiding momentum-driven noise.
