Pashupati Advani cautious on market rally amid Strait of Hormuz uncertainty, LPG shortages

Market veteran Pashupati Advani is not buying this rally.

Speaking on ET Now, the founder of Global Foray said he is "watching the market go up and hoping for yet another dip" — because in his view, the fundamental uncertainties driving the sell-off have not been resolved.

Chief among them: whether the Strait of Hormuz will reopen, and what a prolonged closure means for an India that sources both crude oil and LNG from the other side of it.

"We are getting oil from the other side of the straits and we are getting LNG from the other side of the straits," Advani said. "Do we know if the Strait of Hormuz is open or closed? I do not know. It is a guess."

The rupee's behaviour is telling him something uncomfortable. After briefly strengthening to 84 against the dollar, the currency has slipped back — a signal, in Advani's reading, that the market has not priced in a clean resolution to the supply disruption.

The LPG problem is already on the ground

Advani's concerns are not abstract. He pointed to a tangible supply squeeze playing out in India's LPG market right now. Consumers are reportedly being restricted to one cylinder per month, with rebooking only permitted 25 days after the previous cylinder arrives.

"LPG cylinders are quite hard to find," he said. "We are managing at home in a large city like Bombay, but restaurants are having a lot of difficulty."

His bigger worry is rural and northern India, where an LPG shortage has historically pushed households back to burning wood — a dynamic he fears could create both environmental and social pressure through the summer.

Two months of earnings, gone

On the corporate earnings front, Advani was blunt. The conflict began at the end of February and has now consumed two full months — months that straddle two financial years, which softens the accounting blow slightly, but does not change the operational reality for companies dependent on imports.

"Two full months taken out of a company's earnings is a lot," he said. "Anyone dependent on anything coming from overseas is in some difficult state."

IT: A sector under pressure from all sides

Advani reserved his sharpest observations for India's IT sector, which he described as being caught between three simultaneous headwinds.

First, the H-1B visa squeeze. The US is issuing new visas selectively and at steep cost — undercutting the model Indian IT firms built around deploying talent on-site at American clients.

Second, AI. Advani believes Indian IT companies are scrambling to reposition but none have convincingly succeeded yet. "I do not see any of them that has been able to succeed so far," he said, even as valuations have partially recovered.

Third, and most concerningly for the broader economy: jobs. Advani warned that net hiring across major Indian IT companies may have been close to zero last year — compared to historical norms of 25,000 to 30,000 per company annually for the large players.

"For them to be basically net zero is not cool," he said. "That is going to have a lot of knock-on effect — defaults on loans, housing loans, white goods loans. Not today, but six months to a year down the road."

Where he sees value

Advani's one area of relative optimism: old-economy infrastructure plays. Cement and steel companies, he argued, continue to benefit from government contract flow on roads, housing, and urban infrastructure projects. He cited Mumbai's Coastal Road as an example of the kind of sustained government spending keeping these sectors afloat.

The caveat, even here: power costs have surged, and both cement and steel are energy-intensive industries. The war's knock-on effects on power pricing are beginning to squeeze margins even in sectors that looked insulated.

The net picture Advani paints is one of a market caught between genuine structural opportunities — returning tech talent, potential new unicorns, infrastructure spending — and a cluster of near-term shocks that have not yet fully worked their way through corporate earnings or household balance sheets.

"We are going to have to tighten our belts," he said. "It is a challenge."