Sailesh Raj Bhan, CIO of Nippon India Mutual Fund, highlighted that select sectors—including automobiles, information technology (IT), and financials—present attractive investment opportunities as the market consolidates below record index levels. The firm manages $74.14 billion in assets as of September 30, 2025.

Sector Insights:

• Autos: Expected to benefit from GST cuts, particularly in passenger vehicles. Consumption stocks may also see upside after years of weak volume growth.
• Financials: Large banks and NBFCs remain preferred due to reasonable valuations and potential margin improvement from sustained credit growth.
• IT Services: Valuations are “far more sensible than they have been in the last five years,” offering upside if growth accelerates.

Market Outlook:

• Returns are expected to be earnings-driven rather than valuation-led, with low-teens returns projected over the next three years.
• Mid- and small-cap stocks will need stronger earnings to perform.
• Investors are advised to adopt a systematic investment plan (SIP) approach over the next 12 months.

IPO Caution:
Bhan warned that many new issues are priced at a premium and lack a track record, urging investors to exercise caution.

Market Internals:
While benchmark indices appear strong, small-cap stocks have corrected sharply, with their indices lagging the Nifty by nearly 17–18% year-to-date. He termed this a normal correction in frothier markets, pointing to improving corporate earnings after eight slow quarters as a positive signal.