Ambit cautious on Indian equities; bets on banks, IT and cement amid rising macro risks
Ambit has said the macro backdrop for Indian equities is deteriorating even as some tactical opportunities remain, with higher policy-tightening risk, slowing growth
- Jun 22, 2026,
- Updated Jun 22, 2026 4:01 PM IST
Ambit has said the macro backdrop for Indian equities is deteriorating even as some tactical opportunities remain, with higher policy-tightening risk, slowing growth and likely narrowing market breadth shaping its latest view. It said it prefers large-cap, liquid stocks with stronger balance sheets and reasonable valuations, while staying focused on heavyweight names as market leadership narrows.
In its model portfolio, Ambit has added Axis Bank and UltraTech Cement and removed Shriram Finance. It said banks remain the clearest tactical overweight against NBFCs because higher-rate risk should support EBLR-linked lenders while putting pressure on fixed-rate NBFC books. Ambit also said cement could gain if fuel and polypropylene costs soften, while IT remains a seasonal trade despite a more difficult structural backdrop because of AI.
Portfolio changes and tactical bets Ambit said adding Axis Bank takes its bank allocation from underweight to equal weight alongside existing positions in HDFC Bank, ICICI Bank and SBI. It said it remains overweight on IT through Infosys, TCS, HCL Tech and Tech Mahindra, and continues to view the sector as a tactical seasonal trade.
According to Ambit, this allocation to heavyweight banks and IT names is in line with its rising concentration thesis, under which the top 10 index constituents have historically outperformed during phases of narrowing leadership. It said tactical trades remain available in banks, cement and IT, but each comes with a caveat as slower growth, tighter policy and pressure on earnings continue to build.
Oil risk remains Ambit said India had been losing the emerging market war for capital even before the West Asia conflict, and that trend has continued. It described the US-Iran conflict as a game of chicken that has entered an attempted mutual swerve phase. While the ceasefire has reduced immediate tail risk, Ambit said Iran’s nuclear programme has been deferred, not resolved, and the crude forward curve still prices in risk.
It said structural bypass routes and temporary buffers had reduced the apparent oil supply deficit from 15 mb/d to 5-7 mb/d, but only until July 2026. Ambit has kept its FY27 crude estimate at USD 86-90 and said India, which imports 85% of its oil, cannot avoid the impact.
India versus EMs Ambit said India’s one-year underperformance versus emerging markets at 37 per cent is close to the worst in two decades. CY26 and CY27 EPS dollar revisions stand at -14 per cent and -15 per cent, the weakest among EMs, while valuations remain expensive at 20 times trailing 12-month PE.
FIIs have pulled out $49 billion since December 2024, and Ambit said a ceasefire alone is unlikely to reverse flows unless growth improves or valuations correct. It added that India lacks AI-linked opportunities comparable with Korea and Taiwan, and that capital is moving towards markets seen as home to the next growth cycle.
Headwinds on both fronts Ambit said India’s external cushion is thinning, with merchandise exports stuck near USD 440 billion, IT export growth tapering and FY27 current account deficit likely at 2.5 per cent of GDP. It said RBI measures may offer near-term relief, but a FY27 balance of payments deficit of 2 per cent of GDP could keep the rupee under pressure, with its FY27 estimate at 98 to the dollar.
Ambit said the OIS curve is pricing a tighter policy path, with 10-year G-sec expectations at 7.2-7.4 per cent, even as all four GDP components are under pressure. It said slowdown phases have historically implied 3 per cent Nifty EPS growth and 16 times trailing PE, against consensus FY27 EPS growth of 15 per cent and current 20 times trailing PE.
Ambit said its core portfolio remains defensive, with overweight positions in FMCG, pharma, IT and telecom and a large-, mid- and small-cap allocation of 76:19:5. Since 12 March 2026, it said the portfolio has underperformed the NSE500 by 5 per cent, dragged by IT, though the sector remains up 5 per cent since inception
From the largecaps, Ambit's model porffolio includes names likes Reliance Industries, HDFC Bank, Bharti Airtel, ICICI Bank, State Bank of India, Tata Consultancy Services, Larsen & Toubro, Sun Pharma, Infosys, Axis Bank, Mahindra & Mahindra, ITC, Trent, Tech Mahindra, HCL Technologies, UltraTech Cement, Britaannia, Max Healthcare and Godrej Consumer Products.
From the midcap basket, its model portfolio picks includes names like Indus Tower, Marico, PB Fintech, Fortis Healthcare and Max Financial Services. Ather Energy and HealthCare Global Enterprises are the only two smallcap picks in Ambit's model portfolio.
Ambit has said the macro backdrop for Indian equities is deteriorating even as some tactical opportunities remain, with higher policy-tightening risk, slowing growth and likely narrowing market breadth shaping its latest view. It said it prefers large-cap, liquid stocks with stronger balance sheets and reasonable valuations, while staying focused on heavyweight names as market leadership narrows.
In its model portfolio, Ambit has added Axis Bank and UltraTech Cement and removed Shriram Finance. It said banks remain the clearest tactical overweight against NBFCs because higher-rate risk should support EBLR-linked lenders while putting pressure on fixed-rate NBFC books. Ambit also said cement could gain if fuel and polypropylene costs soften, while IT remains a seasonal trade despite a more difficult structural backdrop because of AI.
Portfolio changes and tactical bets Ambit said adding Axis Bank takes its bank allocation from underweight to equal weight alongside existing positions in HDFC Bank, ICICI Bank and SBI. It said it remains overweight on IT through Infosys, TCS, HCL Tech and Tech Mahindra, and continues to view the sector as a tactical seasonal trade.
According to Ambit, this allocation to heavyweight banks and IT names is in line with its rising concentration thesis, under which the top 10 index constituents have historically outperformed during phases of narrowing leadership. It said tactical trades remain available in banks, cement and IT, but each comes with a caveat as slower growth, tighter policy and pressure on earnings continue to build.
Oil risk remains Ambit said India had been losing the emerging market war for capital even before the West Asia conflict, and that trend has continued. It described the US-Iran conflict as a game of chicken that has entered an attempted mutual swerve phase. While the ceasefire has reduced immediate tail risk, Ambit said Iran’s nuclear programme has been deferred, not resolved, and the crude forward curve still prices in risk.
It said structural bypass routes and temporary buffers had reduced the apparent oil supply deficit from 15 mb/d to 5-7 mb/d, but only until July 2026. Ambit has kept its FY27 crude estimate at USD 86-90 and said India, which imports 85% of its oil, cannot avoid the impact.
India versus EMs Ambit said India’s one-year underperformance versus emerging markets at 37 per cent is close to the worst in two decades. CY26 and CY27 EPS dollar revisions stand at -14 per cent and -15 per cent, the weakest among EMs, while valuations remain expensive at 20 times trailing 12-month PE.
FIIs have pulled out $49 billion since December 2024, and Ambit said a ceasefire alone is unlikely to reverse flows unless growth improves or valuations correct. It added that India lacks AI-linked opportunities comparable with Korea and Taiwan, and that capital is moving towards markets seen as home to the next growth cycle.
Headwinds on both fronts Ambit said India’s external cushion is thinning, with merchandise exports stuck near USD 440 billion, IT export growth tapering and FY27 current account deficit likely at 2.5 per cent of GDP. It said RBI measures may offer near-term relief, but a FY27 balance of payments deficit of 2 per cent of GDP could keep the rupee under pressure, with its FY27 estimate at 98 to the dollar.
Ambit said the OIS curve is pricing a tighter policy path, with 10-year G-sec expectations at 7.2-7.4 per cent, even as all four GDP components are under pressure. It said slowdown phases have historically implied 3 per cent Nifty EPS growth and 16 times trailing PE, against consensus FY27 EPS growth of 15 per cent and current 20 times trailing PE.
Ambit said its core portfolio remains defensive, with overweight positions in FMCG, pharma, IT and telecom and a large-, mid- and small-cap allocation of 76:19:5. Since 12 March 2026, it said the portfolio has underperformed the NSE500 by 5 per cent, dragged by IT, though the sector remains up 5 per cent since inception
From the largecaps, Ambit's model porffolio includes names likes Reliance Industries, HDFC Bank, Bharti Airtel, ICICI Bank, State Bank of India, Tata Consultancy Services, Larsen & Toubro, Sun Pharma, Infosys, Axis Bank, Mahindra & Mahindra, ITC, Trent, Tech Mahindra, HCL Technologies, UltraTech Cement, Britaannia, Max Healthcare and Godrej Consumer Products.
From the midcap basket, its model portfolio picks includes names like Indus Tower, Marico, PB Fintech, Fortis Healthcare and Max Financial Services. Ather Energy and HealthCare Global Enterprises are the only two smallcap picks in Ambit's model portfolio.