Indian equity markets are entering a favourable phase supported by strong corporate earnings and stable macroeconomic conditions, according to Spark Capital Private Wealth's Devang Mehta. As reported by The Economic Times, the market has undergone an extended period of correction and consolidation, creating a healthier foundation for future gains. Mehta emphasized that earnings came out very good across large-caps, mid-caps, and small-caps, with improving macroeconomic conditions and lower crude oil prices turning previous headwinds into potential tailwinds. Latest market data shows Sensex surging over 540 points to settle at 76,809 and Nifty 50 climbing more than 135 points to close at 23,989, with the rally lifting benchmark indices by nearly 4% over the last three trading sessions amid growing optimism surrounding the proposed Iran-US peace deal framework.
While remaining positive on the power sector, Mehta prefers companies that support the broader energy ecosystem rather than power producers themselves. According to The Economic Times, he highlighted opportunities in power automation, transmission infrastructure, and renewable energy-related businesses that stand to benefit from India's growing electricity demand and infrastructure spending. Mehta noted that companies involved in HVDC, power automation, and renewable infrastructure could benefit significantly from the ongoing capex cycle, with the ancillary theme serving as a proxy play for the entire capex, power, and infrastructure theme.
Mehta welcomed HCLTech's partnership with Sarvam but maintained his cautious view on the broader IT services sector. As reported by The Economic Times, he has been negative on IT for the last three years and continues to hold that stance, acknowledging that there can be 10-12% CAGR returns from large IT companies but believing investors seeking alpha may find better opportunities elsewhere in financials, capex-related businesses, and consumption plays. He noted that IT companies continue to face structural challenges despite sharp corrections in valuations.
With earnings remaining healthy and macro conditions improving, Mehta believes Indian equities are well positioned for the medium term. According to The Economic Times, his preferred themes remain power infrastructure, capital expenditure plays, and financials, sectors that he expects to benefit from India's ongoing economic and investment cycle. He noted that there are green shoots showing right now with the risk-reward being quite positive, especially for investors with a one- to two-year horizon. Latest market performance shows Nifty Consumer Durables leading gains with nearly 2% upside, followed by IT and Media, indicating strength in consumption and technology themes.
