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India Equities Remain Attractive from Medium to Long-Term Perspective: ICICI Securities
From a medium to long-term perspective, the Indian equities market remains constructive, according to Pankaj Pandey, head of research at ICICI Securities. Pandey highlighted that the Nifty 50 is currently trading at nearly 17 times price-to-earnings (P/E) on a two-year forward basis, which is below its long-term average of nearly 18.2 times, providing a favorable entry point for investors with a medium to long-term investment horizon.
The current macro headwind for India is the elevated crude oil prices, which have led to a rise in inflation, margin compression for manufacturing companies, and constraints on further monetary easing. However, Pandey expects this situation to be transitory in nature with minimal long-term impact. He also noted that any tangible resolution to the ongoing conflict could trigger a sharp correction in crude oil prices, which would likely boost market sentiment and support equities.
Indian Retail Investors Remain Cautious
Pandey also commented on the behavior of retail investors, who have been getting smarter and more mature as equity investors. Retail investors now don't get swayed away by market volatility and use it to their advantage to accumulate at lower levels. In the months of March and April 2026, when the market fell sharply, inflows into equity mutual funds were at an all-time high of ₹38,000 crore versus an average of ₹26,000 crore, despite markets delivering sub-par returns since the last two years.
Sectoral Preferences
Pandey categorized his sectoral preferences into four key thematic buckets, capturing both cyclical and structural opportunities in the current market environment:
| Sector | Description | Investment View |
|---|---|---|
| Capex Beneficiaries | Continued government-led infrastructure push and early signs of a private capex cycle revival underpin growth visibility | Earnings visibility remains strong with multi-year growth tailwinds; prefer market leaders with robust order books |
| Energy Transition | The sector stands at the cusp of a multi-year investment cycle, led by renewables, transmission, and energy transition initiatives | Structural rerating story with improving ROE profile and long-term visibility |
| Structural Domestic Beneficiaries | Healthy double-digit credit growth, improving asset quality, and stable margins | Core portfolio exposure driven by domestic growth, balance sheet strength, and improving profitability metrics |
| Premiumisation Play | Consumption trend continues to shift toward higher-end discretionary spending | Secular demand-driven growth with strong pricing power and margin expansion potential |
Earnings Outlook
Pandey's assessment of Q4 earnings was that large-caps were in line with expectations, while mid and small-caps continued to outperform. Topline growth came in at nearly 12% YoY, while adjusted PAT growth stood at a relatively modest nearly 5% YoY. However, near-term earnings (Q1–Q2 FY27) may moderate, primarily due to the lagged impact of elevated crude oil prices on margins and inflation. However, on a full-year basis, the impact appears manageable, with Nifty EPS in FY27E and FY28E expected to grow nearly 13–15% CAGR over FY26–FY28E.
Overall, the earnings cycle remains healthy, with temporary margin pressures unlikely to derail the broader growth trajectory.
Investor Takeaway
Investors may consider entering the market with a medium to long-term investment horizon due to a favourable entry point.
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