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Boost Equity to 65% as India's Risk-Reward Improves: Wealth Report

A new wealth management report states the medium-term risk-reward for Indian equities is improving, allowing aggressive investors to consider raising equity allocation to 60-65%. The government's sustained infrastructure and manufacturing focus in the FY27 budget provides a structural growth blueprint. Sectors like infrastructure, defence, capital goods, and export-oriented industries are expected to remain well-supported. While near-term sentiment faces global uncertainties, domestic fundamentals are seen as robust, with a broader earnings recovery forecast into FY27.

Key Points: Investors Can Raise Equity Allocation to 65%: PL Wealth Report

  • Medium-term risk-reward improving
  • Capex thrust boosts earnings visibility
  • Focus on infra, defence, capital goods
  • Maintain tactical cash buffer
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Investors can raise equity allocation to 60-65 pc as medium-term risk-reward improves: Report

PL Wealth report suggests aggressive portfolios can allocate 60-65% to equity as India's medium-term risk-reward improves. Read key sectors and strategy.

"Indian markets are currently absorbing global volatility... but the underlying domestic fundamentals remain robust. - Inderbir Singh Jolly"

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.

- IANS

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Reader Comments

P
Priya S
While the optimism is good, I feel these reports often come when the market is already high. Suggesting 65% equity to aggressive investors now? What about the retail investors who entered at the peak last year? A bit more caution in the messaging would be helpful.
R
Rohit P
The emphasis on strong balance sheets and execution credibility is key. Too many people chase momentum. In the Indian context, sticking to quality companies with good governance is the only way to sleep peacefully at night. Solid advice.
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Sarah B
Interesting read. As an NRI investor, the point about India-US trade engagement is crucial. Clarity there will significantly impact my allocation decisions. The 5% tactical cash buffer is a smart suggestion for navigating volatility.
V
Vikram M
Budget focus on infra is a multi-year theme. Sectors like railways, defence, and green energy are where the real wealth will be created. Time to review my portfolio and increase allocation to these areas. Thanks for the detailed sectoral break-down!
K
Kavya N
Good to see IT services mentioned as resilient. After all the doom and gloom, it's a reminder that our IT giants have strong fundamentals and will adapt. However, the near-term headwinds for consumer-facing sectors are very real. Let's see how the monsoon pans out.

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