The Nifty 50 might be the index everyone watches, but Devang Mehta, Deputy Managing Director & CIO-Equity at Spark Capital Private Wealth, argues that’s where the alpha leaks out. He’s making a strong case for looking beyond the benchmark. The opportunity, he says, lies in specific pockets of earnings and cash flows that the broader index average hides. This is a contrarian stance in a market that often trades on index sentiment alone.
Mehta’s shortlist is specific. He’s favoring capital expenditure (capex) plays, capital-market businesses, and the auto ancillary chain. Discretionary consumption makes the cut too. Why these four? In a post-election economic cycle where government spending is likely to pick up, capex-heavy sectors stand to gain direct tailwinds. Meanwhile, auto ancillaries benefit from the sustained demand for vehicles, a trend that shows no signs of cooling down immediately.
The core of his advice is a shift in mindset. Stop looking at the index level. Start looking at the cash flow. This distinction matters for active traders and long-term investors alike. If the index is consolidating, individual stocks in these targeted sectors can still be printing money. Mehta suggests that the next leg of the bull run won’t be a broad-based rally; it will be selective.
For investors holding a diversified portfolio, this signals a need for rebalancing. Are you overweight in IT or pharma while underweight in capex and auto components? Mehta’s view implies that the risk-reward ratio is currently better in the latter. He’s not calling for a full exit from the market, but rather a tactical reallocation toward where the money is actually being made.