Indian equities are viewed favorably in the long term due to factors like demographics, rising domestic investment, a deepening financial system, diversifying supply chains, and enhanced energy security. PL Wealth’s report suggests a phased entry into quality large-cap and large & mid-cap names in the short term, with an overweight call for the 24–60-month horizon. The report maintains an overweight call on India in the long term, highlighting mid-caps, small-caps, and infrastructure-linked themes as preferred options for SIP-based investors.
Attention is advised to shift towards domestic demand drivers in the medium term (6 to 24 months), focusing on financial-asset penetration, infrastructure development, and manufacturing localization as oil-related pressures ease and inflation peaks. The report also suggests considering adding large private banks, industrials, healthcare, and select small-cap and flexi-cap exposure. The firm emphasizes a selective, quality-first approach to equities amid near-term turbulence caused by factors like crude prices, a softer rupee, and persistent foreign selling.
PL Wealth’s CEO, Inderbir Jolly, highlighted the risks India faces, such as inflation upticks, a weakened rupee against the dollar, and uncertainties related to crude prices and global events. The report forecasts potential market choppiness due to persistently high crude prices, unresolved tensions in West Asia, and the rupee’s structural weakening against the dollar. While near-term earnings estimates are under pressure, with downward revisions in FY27 profit forecasts across various sectors, FY28 numbers are showing more resilience.
Despite a broader participation in mid- and small-cap stocks over the past six months, the report points out that the rally is still sector-specific rather than broad-based across the market.
