Bhatia says the NIFTY 50 and BSE are now at the lower end of their ranges, a clear sign that the markets have moved past their worst day.
But the outlook remains rattled by two big headwinds: oil prices and US tariffs. Interest rates in India and the US keep tightening, and the country hasn’t yet seen the upside from a global shift toward hardware and AI‑related themes.
The banking sector is where the upside sits. Bhatia expects margin expansion and a re‑rating of stock prices over the next two years, even though earnings could stumble short‑term. Small‑ and mid‑cap valuations are still wary, while large‑caps look more reasonable.
On the savings front, Macquarie estimates India’s financial savings at over $500 billion and expects the pool to grow. Companies that can tap into this trend—such as the Multi‑Commodity Exchange, BSE and NSE—stand to benefit.
Sector‑by‑sector, auto sales have surged during the festival season, giving a lift to Hyundai India, Maruti Suzuki and Mahindra & Mahindra. Clean Max Enviro Energy and Hitachi Energy India are highlighted in the power and energy space, driven by industrial demand. IT remains cautious; Bhatia wants to see how the AI theme unfolds in the West before committing.
Looking ahead, investors should watch the upcoming earnings releases, especially in banking and auto. Regulatory updates on insurance will also be a key catalyst. The market’s reaction will hinge on whether the sector‑wide guidance meets or beats analysts’ consensus.