India's growth momentum resilient, constructive on equities
India’s growth momentum remains resilient, supported by a strong Q1FY27 GDP print, returning foreign portfolio investor flows, among other positive factors, a report said on Thursday, going overweight on Banks, Capital Goods and Defence, Diversified Financials, Metals, Healthcare, Telecom and Ports.
The report from PL Wealth also cited robust domestic liquidity and a healthy capital expenditure cycle as positive macro factors for India.
The firm maintained a selective approach across sectors and market capitalisations, while remaining underweight on IT Services, Auto, Consumer and Oil & Gas.
The foreign portfolio investors turned net buyers for two consecutive months and domestic institutional investors continued to supply strong liquidity, the report said, while remaining selectively constructive on Indian equities for a short term (0-6 months).
Valuations remain reasonable relative to historical averages, limiting meaningful downside. The report favoured staggered deployment into quality large-cap and diversified equity strategies, with a preference for stock-picking over passive index exposure.
The firm favoured large private banks, capital goods and consumer durables, alongside selective exposure to quality small-cap, flexi-cap and multi-cap strategies over medium term (6 to 24 months).
Over long term (above 24 months), the firm remained overweight on India, with the structural investment case supported by demographics, financial deepening, domestic capex, defence indigenisation and Make in India. The report also highlighted emerging high-growth areas such as EVs, defence, renewables, capital markets and digital businesses as potential sources of long-term alpha.
The firm flagged that a persistent monsoon deficit, rising El Niño risks, elevated crude prices and the possibility of a 25–50 bps policy rate hike in H2FY27 could create near-term volatility.
"We believe investors should focus on quality businesses, diversify across market capitalisations and deploy capital in a staggered manner rather than take broad-based market exposure,” said Inderbir Jolly, CEO, PL Wealth.
On fixed income, the firm remained overweight on the 3-month to 3-year segment, where attractive accrual and limited duration risk provide a favourable risk-adjusted opportunity.
