With broader markets outperforming and mid- and smallcap indices scaling new highs, Vora believes investors are rewarding sectors that have delivered strong quarterly numbers while punishing those facing earnings downgrades.
Vora said the divergence between largecap and broader markets reflects the underlying earnings picture. Large private banks, NBFCs and energy companies have seen earnings pressure, which has weighed on benchmark indices.
In contrast, sectors with stronger results such as capital goods, consumer discretionary and pharmaceuticals — which have higher representation in mid- and small-cap indices — have continued to outperform.
“It has been textbook, markets mirroring the earnings,” Vora said, explaining that stock movements are closely tracking sector-wise earnings trend
On sector preferences, Vora said Trust Mutual Fund remains overweight on the industrial theme, particularly renewables, capital goods and manufacturing-linked investments supported by production-linked incentive (PLI) schemes.
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He pointed to the rise of multiple smaller private capex projects, which are steadily building order books for engineering and industrial companies. Capital market-linked businesses also remain a preferred area amid volatility and rising financial savings.
The fund house is also positive on electric vehicles, especially in the two-wheeler segment, where premiumisation trends continue to play out. Vora highlighted opportunities linked to auto ancillaries and EV adoption, while describing healthcare and pharma as more stock-specific bets rather than broad sector calls.
Banks, however, have emerged as an area of caution. According to Vora, lenders have underwhelmed on margins despite signs of improving credit growth. Competitive pressure to attract deposits appears to be hurting profitability, particularly among larger banks.
“There seems to be a bigger scramble for the liabilities, for the deposits, and that’s what’s causing a little bit of pressure on the margin side,” he said.
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Vora also urged investors to avoid treating the market rebound as a uniform recovery story. While staying invested through corrections has helped, he noted that returns have varied sharply across sectors and stocks, making portfolio churn important rather than simply holding everything through volatility.
On newer themes such as data centres and artificial intelligence, Vora acknowledged the long-term opportunity in energy infrastructure and transmission, but warned against assigning overly optimistic long-term valuations to cyclical technology trends.
He argued that while the AI-led earnings surge in global semiconductor companies has been impressive, investors should remain mindful of the gap between lofty expectations and actual revenue generation.
In cement, Vora sees an industry gradually becoming more disciplined as consolidation improves pricing behaviour. However, Trust Mutual Fund has limited exposure to the sector, with investments restricted to one mid-cap cement company.
