Bajaj Finserv Expert: Time to Invest in Indian Equities

Sorbh Gupta, head of equity at Bajaj Finserv Asset Management, anticipates Indian stocks will outperform other emerging markets. He cites improving foreign investor sentiment and attractive valuations as key reasons. Gupta noted that corporate India is showing early signs of a cyclical earnings recovery, which should positively impact stock prices in the coming quarters. The easing of the Middle East crisis has eased pressure on India's balance of payments, further supported by the RBI's monetary stance and tax adjustments for FPI debt flows.

Gupta believes current valuations are in a comfortable zone after a period of consolidation. With earnings projected to accelerate over the next one to two years, he advises increasing equity allocation. For investors, a disciplined approach focusing on consistency, like using a three-month Systematic Transfer Plan (STP), is recommended over market timing. The risk-reward profile is seen as balanced for long-term investors, with an expected reversal of FPI outflows into inflows.

Key sectors like pharma, healthcare, and wellness are highlighted due to rising health awareness and favorable demographics. Financials, particularly large private sector banks, are also favored for their potential to deliver better performance. While acknowledging the long-term potential of AI, Gupta cautioned about elevated valuations in some related global companies, advising realistic expectations and a focus on long-term fundamentals over near-term enthusiasm.