D-st consolidation near end; mid IT, PSUs to lead India Inc comeback: Amar Ambani, YES Sec
Amar K Ambani, Executive Director at YES Securities, believes the backdrop is constructive, with rural demand improving, inflation moderating, and fiscal measures supporting consumption.
- Nov 5, 2025,
- Updated Nov 5, 2025 10:11 AM IST
Despite the recent weakness in the Indian equities, which may have added some volatility, Amar K Ambani, Executive Director at YES Securities, remains optimistic about a gradual recovery in FY26. He believes the backdrop is constructive, with rural demand improving, inflation moderating, and fiscal measures supporting consumption.
In a recent interaction with Business Today, Ambani expects 12–14 per cent returns over the next year as markets regain momentum. He highlights resilient earnings, especially in midcap IT, capital goods, and PSUs, and sees emerging opportunities in EMS, value retail, and CDMO spaces. Precious metals, he adds, remain in a structural bull run despite short-term corrections. Read the edited excerpts:
BT: Indian equity markets have turned volatile after a sharp run-up in the second half of October ahead of the festive season. What are your targets for Nifty and Sensex for the second half of FY26? What are the major tailwinds and/or headwinds for these levels?
Ambani: The backdrop remains constructive with rural demand gradually reviving, aided by softer inflation and supportive fiscal measures of income tax cuts and GST reductions. What’s encouraging is that recent GST collections have continued to trend higher even after the rate was cut, underscoring the underlying strength of consumption and formalization in the economy.
Following a year-long correction, valuations have moderated to far more reasonable levels. The marginally elevated index multiple largely reflects the weight of newly listed digital and consumer-tech companies that are yet to achieve profitability. In the last decade or so, Indian markets have rarely stayed subdued for beyond 12 to 14 months.
We expect equities to resume their upward trajectory towards the fag end of FY26. Over the next 12 months, we foresee potential returns of 12–14% for the broader market.The major headwind remains Trump-era tariff policies, which could continue to weigh on global trade sentiment and our export-oriented sectors.
BT: Earnings Season: What is your view on the ongoing result season and how do you rate India Inc's performance? Which companies/sectors have surprised you and which have disappointed? Do you see rerating for any sector/segment after this results season?
Ambani: The ongoing results season has been encouraging and has largely exceeded expectations. Earnings downgrades have clearly tapered off, and management commentaries across sectors have turned notably more confident. While forward guidance hasn’t been raised meaningfully yet, the tone suggests we are nearing the end of the earnings downgrade cycle — a view we had held even before this season began.
From a sectoral standpoint, midcap IT has been a pleasant surprise with improving deal momentum and resilient margins. Capital goods companies have reported strong order inflows, while cement, infrastructure, and agro-chemicals have shown healthy topline growth, indicating robust demand. Oil & Gas and metals too have delivered operational performances ahead of estimates. On the flip side, auto ancillaries and consumer staples have been somewhat underwhelming, with margin pressures and volume growth still lagging expectations.
Importantly, mid- and small-cap companies have posted better-than-expected numbers overall, and we believe this segment is poised to attract renewed liquidity over the next few months, setting the stage for selective sectoral rerating.
BT: Thematic Trends: Select retail favourite stocks from sectors like railways, defence, renewable energy, and PSUs have underperformed. What is your outlook ahead? Do you see any other niche themes emerging in the broader markets, or will these sectors regain momentum? How can investors generate alpha?
Ambani: While sectors like railways, defence, renewable energy, and PSUs have seen periods of underperformance, the outlook ahead appears mixed but gradually improving. Railway allocations in the FY26 Budget were largely flat at around ₹2.52 lakh crore, indicating that most of the capex-driven upside is already priced in, though execution-led plays may still offer selective opportunities. Defence, after last year’s correction, has regained traction with stronger domestic manufacturing (production crossing ₹1.5 lakh crore) and a clear policy push towards self-reliance and exports—making it a structural long-term story despite near-term valuation-driven mini cycles. PSU banks continue to outperform with record profits, improving credit growth, and policy support amid easing monetary conditions. Broader PSUs too are back in focus as the government plans major reforms in power distribution, including debt restructuring and potential privatization of discoms, which could unlock value if implemented effectively.
Among upcoming themes, we prefer value retailers offering affordable products with efficient cost structures and catering to well-defined customer segments. Electronics manufacturing services (EMS) firms stand to benefit from accelerating import substitution and growing domestic demand. At the same time, contract development and manufacturing (CDMO) companies are poised for strong growth as global pharmaceutical players seek reliable, high-quality partners and broaden their supply chains outside China.
BT: Primary Market: The IPO market is buzzing again with multiple issues lined up for November. However, valuations remain a concern. Do you think primary market investors are now more rational in assessing value, fundamentals, and growth potential? What could pause this IPO flurry?
Ambani: The IPO market has certainly been in momentum for a while. Retail investors today appear a little more discerning when it comes to evaluated valuations, business models, and growth potential. That said, abundant liquidity in the system continues to provide room for even richly valued issues to get subscribed. We’ve seen quite a few high valued IPOs in the last couple of years, which leave very little on the table for investors.These listings have struggled to sustain post-listing gains, reminding us that long-term performance ultimately depends on fundamentals, not hype.
But, there is little reason to expect a pause in the IPO flow. The primary market will witness temporary lulls only if multiple listings fail to generate returns for shareholders and when broader indices enter a prolonged corrective phase.
BT: Precious metals like gold and silver have seen a steep correction post the festive season. What’s your outlook on these avenues? For investors who missed the earlier rally, what’s the best strategy now? Do you see any other metals outperforming in the near term?
Ambani: Gold, and likewise silver, continue to be entrenched in a structural bull trend. Despite occasional geopolitical negotiations, the ongoing global uncertainty, fiscal stress, and trade frictions keep reinforcing the safe-haven demand for precious metals. Central banks remain steady accumulators of gold, with China at the forefront, signaling an evident move toward diversification of reserves. With the dollar index losing strength and prospects of additional Fed rate cuts ahead, the broader outlook for gold and silver stays positive.
That said, after the sharp run-up over a short span, the rally may pause temporarily as the rupee has stabilised and is unlikely to depreciate further in the near term. Structurally, however, the upward trajectory remains intact. Broader concerns over the fiscal health of developed economies and the increasing weaponization of global finance are prompting investors to seek assets they can physically own and control, free from counterparty or systemic risks.
As for non-precious metals, supply conditions remain tight across copper, aluminium, and zinc, yet a sustained rally continues to hinge on a meaningful recovery in Chinese demand, which so far has been muted. That said, long-term structural drivers such as the rapid adoption of AI technologies and electric vehicles (EVs) continue to act as powerful catalysts, though their full impact on metal demand will play out gradually over the coming years.
Despite the recent weakness in the Indian equities, which may have added some volatility, Amar K Ambani, Executive Director at YES Securities, remains optimistic about a gradual recovery in FY26. He believes the backdrop is constructive, with rural demand improving, inflation moderating, and fiscal measures supporting consumption.
In a recent interaction with Business Today, Ambani expects 12–14 per cent returns over the next year as markets regain momentum. He highlights resilient earnings, especially in midcap IT, capital goods, and PSUs, and sees emerging opportunities in EMS, value retail, and CDMO spaces. Precious metals, he adds, remain in a structural bull run despite short-term corrections. Read the edited excerpts:
BT: Indian equity markets have turned volatile after a sharp run-up in the second half of October ahead of the festive season. What are your targets for Nifty and Sensex for the second half of FY26? What are the major tailwinds and/or headwinds for these levels?
Ambani: The backdrop remains constructive with rural demand gradually reviving, aided by softer inflation and supportive fiscal measures of income tax cuts and GST reductions. What’s encouraging is that recent GST collections have continued to trend higher even after the rate was cut, underscoring the underlying strength of consumption and formalization in the economy.
Following a year-long correction, valuations have moderated to far more reasonable levels. The marginally elevated index multiple largely reflects the weight of newly listed digital and consumer-tech companies that are yet to achieve profitability. In the last decade or so, Indian markets have rarely stayed subdued for beyond 12 to 14 months.
We expect equities to resume their upward trajectory towards the fag end of FY26. Over the next 12 months, we foresee potential returns of 12–14% for the broader market.The major headwind remains Trump-era tariff policies, which could continue to weigh on global trade sentiment and our export-oriented sectors.
BT: Earnings Season: What is your view on the ongoing result season and how do you rate India Inc's performance? Which companies/sectors have surprised you and which have disappointed? Do you see rerating for any sector/segment after this results season?
Ambani: The ongoing results season has been encouraging and has largely exceeded expectations. Earnings downgrades have clearly tapered off, and management commentaries across sectors have turned notably more confident. While forward guidance hasn’t been raised meaningfully yet, the tone suggests we are nearing the end of the earnings downgrade cycle — a view we had held even before this season began.
From a sectoral standpoint, midcap IT has been a pleasant surprise with improving deal momentum and resilient margins. Capital goods companies have reported strong order inflows, while cement, infrastructure, and agro-chemicals have shown healthy topline growth, indicating robust demand. Oil & Gas and metals too have delivered operational performances ahead of estimates. On the flip side, auto ancillaries and consumer staples have been somewhat underwhelming, with margin pressures and volume growth still lagging expectations.
Importantly, mid- and small-cap companies have posted better-than-expected numbers overall, and we believe this segment is poised to attract renewed liquidity over the next few months, setting the stage for selective sectoral rerating.
BT: Thematic Trends: Select retail favourite stocks from sectors like railways, defence, renewable energy, and PSUs have underperformed. What is your outlook ahead? Do you see any other niche themes emerging in the broader markets, or will these sectors regain momentum? How can investors generate alpha?
Ambani: While sectors like railways, defence, renewable energy, and PSUs have seen periods of underperformance, the outlook ahead appears mixed but gradually improving. Railway allocations in the FY26 Budget were largely flat at around ₹2.52 lakh crore, indicating that most of the capex-driven upside is already priced in, though execution-led plays may still offer selective opportunities. Defence, after last year’s correction, has regained traction with stronger domestic manufacturing (production crossing ₹1.5 lakh crore) and a clear policy push towards self-reliance and exports—making it a structural long-term story despite near-term valuation-driven mini cycles. PSU banks continue to outperform with record profits, improving credit growth, and policy support amid easing monetary conditions. Broader PSUs too are back in focus as the government plans major reforms in power distribution, including debt restructuring and potential privatization of discoms, which could unlock value if implemented effectively.
Among upcoming themes, we prefer value retailers offering affordable products with efficient cost structures and catering to well-defined customer segments. Electronics manufacturing services (EMS) firms stand to benefit from accelerating import substitution and growing domestic demand. At the same time, contract development and manufacturing (CDMO) companies are poised for strong growth as global pharmaceutical players seek reliable, high-quality partners and broaden their supply chains outside China.
BT: Primary Market: The IPO market is buzzing again with multiple issues lined up for November. However, valuations remain a concern. Do you think primary market investors are now more rational in assessing value, fundamentals, and growth potential? What could pause this IPO flurry?
Ambani: The IPO market has certainly been in momentum for a while. Retail investors today appear a little more discerning when it comes to evaluated valuations, business models, and growth potential. That said, abundant liquidity in the system continues to provide room for even richly valued issues to get subscribed. We’ve seen quite a few high valued IPOs in the last couple of years, which leave very little on the table for investors.These listings have struggled to sustain post-listing gains, reminding us that long-term performance ultimately depends on fundamentals, not hype.
But, there is little reason to expect a pause in the IPO flow. The primary market will witness temporary lulls only if multiple listings fail to generate returns for shareholders and when broader indices enter a prolonged corrective phase.
BT: Precious metals like gold and silver have seen a steep correction post the festive season. What’s your outlook on these avenues? For investors who missed the earlier rally, what’s the best strategy now? Do you see any other metals outperforming in the near term?
Ambani: Gold, and likewise silver, continue to be entrenched in a structural bull trend. Despite occasional geopolitical negotiations, the ongoing global uncertainty, fiscal stress, and trade frictions keep reinforcing the safe-haven demand for precious metals. Central banks remain steady accumulators of gold, with China at the forefront, signaling an evident move toward diversification of reserves. With the dollar index losing strength and prospects of additional Fed rate cuts ahead, the broader outlook for gold and silver stays positive.
That said, after the sharp run-up over a short span, the rally may pause temporarily as the rupee has stabilised and is unlikely to depreciate further in the near term. Structurally, however, the upward trajectory remains intact. Broader concerns over the fiscal health of developed economies and the increasing weaponization of global finance are prompting investors to seek assets they can physically own and control, free from counterparty or systemic risks.
As for non-precious metals, supply conditions remain tight across copper, aluminium, and zinc, yet a sustained rally continues to hinge on a meaningful recovery in Chinese demand, which so far has been muted. That said, long-term structural drivers such as the rapid adoption of AI technologies and electric vehicles (EVs) continue to act as powerful catalysts, though their full impact on metal demand will play out gradually over the coming years.