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Ambit Sees Alpha in Defence and Manufacturing, Remains Cautious on Small and Mid Caps
M
Moneycontrol•19-10-2026, 06:57
Ambit Sees Alpha in Defence and Manufacturing, Remains Cautious on Small and Mid Caps
- •Ambit Head of Institutional Equities Nitin Bhasin expects limited downside for the Nifty 50 as valuations have moderated to 20 times trailing earnings.
- •The firm remains cautious on small and mid-cap stocks due to elevated valuations and risks of growth moderation from input-cost inflation.
- •Defence and manufacturing sectors are highlighted as key structural opportunities to generate alpha once global uncertainties subside.
- •Banking stocks present a potential mean-reversion opportunity following recent underperformance and attractive valuations.
- •Persistent inflation and potential El Niño disruptions mean fiscal support will likely play a larger role with RBI monetary easing constrained.
Key Questions Answered
Nitin Bhasin remains cautious on small- and mid-cap stocks due to elevated valuations and potential growth moderation driven by input-cost inflation, leaving little margin for error.
Once global uncertainties subside, defence and manufacturing offer structural opportunities to generate alpha, while banks present a potential mean-reversion opportunity due to their recent underperformance and attractive valuations.
A more pressing challenge for India is the sustained slowdown in FDI inflows, which have dropped from 1.3 percent of GDP during FY19-23 down to just 0.2 percent of GDP since then.
