1.Markets stabilising after correction; positioning turning more balanced:After the recent phase of consolidation and relative underperformance, Indian equities are starting to stabilise. Valuations have moderated from peak levels, and positioning appears more balanced. While the market may not see a sharp rerating in the near term, downside risks are getting limited as expectations have reset across sectors.

2.Domestic growth drivers remain intact; consumption + capex visibility improving: India continues to benefit from strong domestic macro fundamentals, with private consumption gradually recovering (aided by tax cuts, GST rationalisation and easing inflation), while government-led capex and infrastructure should improve further. The credit cycle continues to be supportive, and improved capacity utilisation is likely to drive incremental private capex in FY27.

3.Global macro and geopolitics to keep volatility elevated: Global cues remain mixed, with geopolitical tensions (Middle East), crude oil volatility and trade uncertainties continuing to influence risk appetite. Any sustained rise in crude or global risk-off events could weigh on flows and sentiment. However, India’s lower external vulnerability relative to peers provides some cushion.

4.Overall, we remain positive on Indian equities over the medium to long term, and view near term market volatility as an opportunity to accumulate high quality businesses with strong balance sheets and sustainable earnings visibility.