New Delhi, Feb 16 As Indian markets' medium‑term risk‑reward dynamics improve, investors wanting aggressive portfolios can consider 60–65 per cent equity allocation, with conservative investors maintaining higher fixed‑income exposure and a tactical cash buffer of about 5 per cent, a report said on Monday.
PL Wealth, the wealth management arm of PL Capital, said in the report, Indian equity markets are navigating a phase of consolidation but retain a robust structural trajectory, with "medium-term risk-reward dynamics gradually improving."
The government’s sustained emphasis on infrastructure development, logistics expansion, manufacturing competitiveness and digital capacity building in the Union Budget for FY27 signals a structural growth blueprint rather than a short-term cyclical stimulus, the firm said.
Capex thrust enhances corporate earnings visibility into FY27, particularly across infrastructure‑linked sectors, capital goods, defence manufacturing, electronics and industrial supply chains, the report said.
"Over the medium term, sectors aligned with infrastructure, defence, logistics, capital goods and select manufacturing themes are expected to remain well supported. Export-driven segments such as engineering goods, textiles, and gems and jewellery may benefit from improving trade visibility and ongoing global supply chain diversification," the report said.
Global uncertainties, currency fluctuations and earnings recalibration have tempered near‑term sentiment, amidst fiscal momentum, macro stability and improving investment visibility.
Investor positioning is expected to adjust dynamically to domestic policy signals and evolving clarity around the India–US trade engagement, which could influence export-oriented and capital-intensive industries. Investment preference should tilt toward companies with strong balance sheets, execution credibility and sustainable earnings visibility, the firm suggested.
“Indian markets are currently absorbing global volatility and an earnings recalibration phase, but the underlying domestic fundamentals remain robust,” said Inderbir Singh Jolly, CEO, PL Wealth Management.
PL Wealth maintained that financials, automobiles, industrials and IT services have demonstrated relative resilience, while consumer-facing and select banking segments have faced near-term headwinds. As government spending gains traction and order inflows convert into revenue growth, earnings recovery is expected to broaden into FY27, providing the fundamental trigger for a more durable market upcycle, the firm forecasted.
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