India’s equity markets may have emerged from the worst phase of the recent correction, with leading fund managers arguing that the next leg of returns will be driven less by broad market moves and more by stock-specific opportunities across sectors where investor expectations remain subdued.
Speaking at the ET NOW Markets Summit 2026 during a session “Finding Alpha in a Crowded Market,” market veterans Sunil Singhania, Founder of Abakkus Asset Manager LLP, Sandeep Tandon, CIO of Quant Mutual Fund, and Sailesh Bhan, President and CIO, Equity Investments at Nippon India Mutual Fund, discuss the biggest challenge investors are facing in the current market and shared a constructive outlook on Indian equities despite ongoing global uncertainties.
Created with AI. Errors are possibleThe investment veterans also shared their views on market opportunities, emerging themes, stock selection, and how investors can navigate changing conditions to create long-term wealth.
India is in a good spot: Sunil Singhania
Singhania said the past two years had tested investors through a series of challenges, including trade tensions, tariff-related uncertainties and the conflict in West Asia, which at one stage threatened to push crude oil prices sharply higher.
“The last two years have been incredibly challenging. One issue followed another—whether it was the trade tensions that were unfavourable to India, the year of uncertainty regarding tariffs, or the conflict in West Asia that drove crude prices up to $120,” he said.
However, he noted that the Indian economy has demonstrated remarkable resilience, aided by government policy measures, GST-led recovery and stronger-than-expected corporate earnings over the last two quarters.
“So, at the time, our view was simply that the war couldn’t last forever. And obviously, since the war isn’t going to last forever, it’s only a matter of time before sanity prevails. Actually, it has lasted longer than we expected,” he added.
According to him, concerns around crude oil availability never materialised despite geopolitical tensions, with global supply remaining adequate. He believes that once geopolitical uncertainties ease, crude markets could witness abundant supply, while the global shift towards renewable and electric energy sources is likely to keep demand growth in check.
“Back in March when the war broke out, the concern wasn’t just about price, but the availability of crude and gas. I think even now—even before the events of the last couple of days—availability hasn’t been an issue; there is more than enough supply of crude. In fact, our view remains that once this settles, there will be an abundance of supply. On the demand side, every country is taking steps to shift away from a reliance solely on fossil-fuel-based energy toward options like electric energy—via renewables, and so on,” Singhania said.
“Things definitely look like they are bottoming out,” Singhania said, adding, “Obviously, there is always uncertainty—that’s the nature of markets. But as we speak, I think we are in a very, very good spot.”
Forget the Index, Focus on Stocks: Sandeep Tandon
For Quant Mutual Fund’s Sandeep Tandon, behavioural indicators rather than conventional macro signals provided the clearest evidence that the market had reached a turning point earlier this year.
“We discussed how, after two years, we had turned bullish on small-cap and micro-cap stocks. Looking at it purely from a behavioural standpoint, we reached a stage where people had virtually given up on India; we had never seen such negative sentiment towards the country. At any conference abroad, no one wanted to discuss India. These are classic behavioural signs of a market bottoming out—when people give up at the lows and abandon bullish thinking. Even the best strategists, who had remained bullish for a long time, gave up on India over the last three months; top global firms turned negative. That was the data point we tracked, and we spotted the opportunity. We observed a capitulatory move in mid-caps, small-caps, and particularly micro-caps—a classic signal that played out between January and March—and we were able to capitalize on that opportunity,” he noted.
Looking ahead, Tandon believes investors should move beyond tracking benchmark indices and focus instead on company-specific opportunities.
“You have to look past broader indices and focus on individual stocks. I would say that even sectoral themes are becoming less relevant; it is becoming a highly stock-specific landscape. Areas characterized by gross under-ownership, undervaluation, and negative sentiment—those are the spaces that will generate alpha this year,” he argued.
Private banks at cheapest valuations ever, pharma and consumer also attractive: Sailesh Bhan
Echoing similar view, Sailesh Bhan said the large-scale foreign institutional investor selling witnessed over recent months has created attractive opportunities across multiple sectors.
“Thanks to the significant FII sell-off, opportunities are emerging across many market segments. These are times marked by bad news, yet prices are actually very attractive everywhere,” Bhan said.
He identified private sector banks as one of the most compelling opportunities in the market, noting that many are trading at historically low valuations despite maintaining strong asset quality and healthy balance sheets.
Bhan also highlighted pharmaceuticals as a sector where valuations remain reasonable and investor expectations are subdued. The consumer sector, while still relatively expensive on traditional valuation metrics, could also surprise positively because market expectations for growth have fallen sharply, he said.
“Private sector banks, for instance, are trading at their cheapest valuations ever—despite boasting rock-solid credit quality—so there is significant opportunity there. Pharmaceuticals is another space with sensible valuations and very low expectations. Then there is the consumer sector; while valuations might be high, expectations are so low that no one believes growth beyond single digits is possible,” he said.
“I believe the best opportunities lie where expectations are very low, as there is potential for massive surprises over the next two or three years. Those are the areas where we want to deploy capital, and private sector banks are a key focus. Consumer goods is also important sector. And even IT services — it is possible that things might shift; the slowdown might not be as severe as people are predicting. At an earnings yield of 6–7%, some of these could become interesting. Of course, this involves a timeframe of two to three years; it takes time,” Bhan concluded.
