As of September 24, the BSE Sensex has risen by 5% year-to-date, whereas the broader indices BSE Midcap and BSE Smallcap saw declines of 1% and 3%, respectively.
Equity investors on Dalal Street have had a mixed experience in the current calendar year thus far. As of September 24, the benchmark equity index BSE Sensex saw a year-to-date increase of 5%. In contrast, during the same timeframe, the broader indices BSE Midcap and BSE Smallcap experienced declines of 1% and 3%, respectively. Market sentiment was affected by various elements, such as geopolitical tensions, issues related to Trump’s tariffs, and withdrawals by foreign institutional investors. So, what direction is the market taking? Which areas could yield a substantial return for investors in the future? Vinod Nair, Head of Research at Geojit Investments, shared his insights in an interaction with Business Today. Excerpts with edits:
BT: Which themes are expected to produce significant returns for investors in the coming 12–24 months?
Nair: In the coming 12 to 24 months, it seems that domestic investment themes are poised to yield substantial returns. Tax cuts, reductions in GST rates, inflation moderation, and possible interest rate decreases are among the domestic reforms expected to boost disposable incomes for both rural and urban households, thereby enhancing consumption. As a result, sectors driven by consumption—including automobiles, consumer durables, real estate, and FMCG—are expected to benefit. The infrastructure sector continues to be appealing, bolstered by the government’s ongoing capital expenditure initiatives and modernization strategy. Moreover, the growing demand in essential sectors like steel and cement, along with the accelerating activity in nascent fields such as data centres and green energy, bolsters the optimistic investment outlook, although this comes with certain risks associated with execution.
Could you provide a list of stocks likely to yield double-digit returns in the coming year?
Nair: Our outlook is positive regarding Tata Consumer Products, Suzlon Energy, and HG Infra. Tata Consumer Products’ diversified portfolio, which includes prominent tea and salt brands, strategically positions the company for sustained growth in the long run. It is anticipated that earnings will experience robust growth in the upcoming years, fueled by a healthy increase in topline and margins. The stock is presently trading at a level that is moderately above its long-term average valuation.
Conversely, Suzlon is poised for substantial growth, with a revenue CAGR of 42% and an earnings CAGR of 43% over FY25–27E, fueled by a 5.7 GW order book and enhanced capacity utilization. It is well-placed for ongoing profitability due to backward integration, ALMM compliance, and margin expansion from core segments, but execution discipline is essential.
HG Infra enjoys robust business visibility due to the growing prospects in road, rail and solar initiatives, as well as a current order backlog of approximately three times TTM revenue. To promote future growth, management is focusing on diversifying the order book and ensuring a healthy margin profile.
What advice would you give to investors who are currently not participating?
Nair: For those investors who have been waiting on the sidelines, it is now a suitable moment to think about gradually boosting their equity exposure in accordance with their risk tolerance. Government reforms and a favourable monsoon have improved earnings visibility for H2FY26, supporting the downside and justifying valuation. Additionally, the presence of mild inflation and the anticipated 6.5% GDP growth for FY26 will draw liquidity into the market. At the same time, the softer dollar index and declining US yields are contributing to a more advantageous environment for Indian equities. In recent months, FII outflows have lessened, indicating a sentiment improvement as India’s premium valuation has decreased. Whenever India nears a trade agreement with the US, it will greatly benefit the domestic market.
