Consumption, power capex to drive markets despite higher oil prices: Elara | Latest News Updates

India’s stock market could find its next leg of growth from consumption and power capital expenditure, even as higher oil prices remain a key risk for the economy, according to Bino Pathiparampil, Head of Research at Elara Securities.

He sees improving growth across areas such as fast-moving consumer goods (FMCG), domestic pharmaceuticals, hotels, retail and online platforms, while increased government focus on power spending could benefit power generators and related companies.

“So, consumption and power capex continue to be the major drivers of growth,” Pathiparampil said. He believes this trend is likely to continue as consumption growth improves across several parts of the economy.

At the same time, investors will have to adjust to a higher oil-price environment. Pathiparampil expects oil prices to move around current levels, with a possible variation of $5-$10, rather than falling back to levels seen before West Asia war. This could remain a concern for India because the country is a net importer of oil and other commodities.

“We have to learn to live with a new level of oil prices,” he said, adding that the Indian economy has already adjusted to the higher level.

On the IT sector, Pathiparampil believes the current weak phase is not over yet, despite the recent rebound in IT stocks. After gaining around 10-20% from their recent lows, he expects the stocks to consolidate while investors wait for clearer signs of an earnings recovery.

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The focus for IT companies will increasingly shift towards the outlook for 2027-28 (FY28) and 2028-29 (FY29), particularly deal wins and management commentary on future growth. Pathiparampil also expects artificial intelligence (AI) related services to become an important factor, as Indian IT companies pursue more AI-focused deals.

“IT industry and IT companies, IT services companies, are not done with. They will continue to survive and grow,” he said.

Pathiparampil believes strong AI-related deal wins could eventually provide a fresh growth trigger and lead to a re-rating of the IT sector. For the broader market, however, he expects consumption and power capex to remain the more immediate growth drivers, while investors continue to monitor oil prices and geopolitical risks.