Strategic Allocation Outlook
Neutral-to-positive stance on equities; carry and gold remain attractive
| Asset Class | Our View | Commentary |
| Equity | Neutral – Bias Positive | Bottom-up opportunities still exist. Follow 60:20:20 when it comes to large, mid and smallcap allocation. It’s a buy-on-dip market. |
| Debt | Positive | A barbell approach is prudent — blending select long-duration exposure with 2–3-year high-quality accrual strategies. |
| Gold & Silver | Positive | Suggested to buy on the dip. Maintain it as a strategic allocation. |
| Real Estate | Negative | Opting for investments through REITs and realty stocks might be the favorable choice. |
| International Equities | Netural | Maintain it as a strategic allocation; avoid going overweight. Tactically positive on China. |
| Investment Ideas For FY26 | 1. China
2. Capital Markets |
Suggested to be part of satellite portfolio. Allocation: 5-10%, Staggered deployment recommended. |
Equity Market Outlook
Earnings momentum steady, valuations demand selectivity
Fixed Income Outlook
Stable rates, carry still attractive
Sectoral Outlook
Favoring Domestic Plays Amid Global Uncertainty
| Sector | Outlook | Rationale | Preferred Positioning |
| Financials | Positive | Credit growth strong, asset quality stable, margin tailwinds from lower rates & liquidity normalization. | Overweight large private banks and diversified NBFCs. Add select PSU banks with improving asset quality. |
| Capital Goods & Industrials | Positive | Beneficiaries of rising public & private capex; strong order inflows across defence, railways, and power. | Overweight PSUs like HAL, BEL, and execution-focused EPCs. |
| Healthcare | Positive | Hospital occupancy rising, pharma growth visible in both US specialty and domestic. | Overweight hospitals specialty pharma. |
| Telecom | Positive | ARPU improving, sector moving toward profitability. | Prefer leaders; integrated telcos with 5G monetization. |
| Consumer Discretionary | Selective | Urban premium demand robust, supportive macros (tax cuts + low inflation). | Focus on autos, QSRs, durables with brand and pricing strength. |
| Consumer Staples | Neutral to Selective | Input cost relief aiding margins; rural demand recovering slowly. GST rate cut (if implemented) could be a catalyst. | Hold core names with pricing power and rural exposure. |
| IT Services | Cautious | Deal wins muted, margin pressure visible; client spending under scrutiny. | Stay underweight; monitor H2 outlook for potential re-entry. |
| Metals & Commodities | Tactical | Global pricing soft, China slowdown impact visible; pick only balance sheet-strong names. | Tactical exposure to low-cost producers with deleveraged balance sheets. |
| Auto & Ancillaries | Tactical | Tractor and 2W demand to benefit from rural rebound; EV pipeline builds long-term case. | Prefer OEMs with EV focus and rural demand recovery levers. |
