Indian equity markets are likely to remain stock-specific and execution-driven in the near term, with foreign institutional investor (FII) flows potentially returning as global investors begin looking beyond the crowded AI trade, according to Invexa Capital. As reported by NDTV Profit, Tushar Bohra, Partner at Invexa Capital, noted that markets are likely to remain stock-specific and execution-driven going forward, while FII flows could return as global trades near saturation. The market is becoming increasingly unforgiving towards companies that disappoint on earnings, with execution likely to emerge as the biggest differentiator for stock performance.
On sector preferences, Bohra continues to favour private banks and non-banking financial companies (NBFCs), despite near-term pressure on banking margins. According to NDTV Profit, he expects the better-managed private lenders to deliver superior shareholder returns, while select public sector banks could continue outperforming their peers. The pharma sector also remains constructive, particularly large-cap companies, with cement and steel emerging as attractive contrarian opportunities. Consumption stocks could surprise positively if earnings improve even modestly, while automobiles and textiles stand to benefit from easing tariff pressures. Among other themes, he believes logistics and water-related businesses could evolve into multi-year structural growth stories, while pointing to early signs of a cyclical recovery in the chemicals sector.
Currency volatility and crude oil prices remain the biggest macro risks for domestic equities, as reported by NDTV Profit. However, measures taken by the government to stabilise the rupee have eased investor concerns, while crude oil is likely to remain adequately supplied unless geopolitical tensions escalate considerably. The banking sector continues to face pressure from net interest margin (NIM) compression, although stronger franchises are better placed to navigate the environment.
On information technology stocks, Bohra warned that further valuation corrections cannot be ruled out, with the June and September quarter results likely to provide a clearer picture of the impact of the ongoing disruption in the sector. According to NDTV Profit, he added that investors should prepare for major earnings surprises in both directions as companies report their quarterly numbers. Among other themes, he believes logistics and water-related businesses could evolve into multi-year structural growth stories, while pointing to early signs of a cyclical recovery in the chemicals sector.
