Markets at all-time high: Trupti Agrawal of WhiteOak’s checklist to identify great firms on D-Street

Benchmark equity indices NSE Nifty and BSE Sensex scaled new all-time highs on December 1 after the country’s economy grew at a higher-than-expected 8.2% in July-September—the fastest pace in six quarters. Sentiment further improved after rating agency Crisil raised its GDP growth forecast for FY26 to 7% from 6.5%, following first-half growth of 8% that exceeded expectations.

On a year-to-date basis, the 50-share Nifty has gained 11% to an all-time high of 26,325 on December 1, 2025. The Nifty Midcap 100 advanced 7%, while the Nifty Smallcap 250 index declined 5% during the same period. The 30-share Sensex also gained more than 10% to all-time high of 86,159 during the same period. So, where is the market headed after record highs? And how should investors put fresh money to work in this market?

In an interaction with Business Today, Trupti Agrawal, Senior Fund Manager-Equity, WhiteOak Capital Management, said that the small- and mid-cap (SMID) to large-cap premium has narrowed to 26% in October 2025, from 36% a year ago. After a brief slowdown, the earnings cycle is showing signs of recovery, with revisions steady and downgrades appearing to have bottomed out.
 

Q2 earnings

While sharing her views on the September quarter earnings, Agrawal added that after a period of slowdown, the results indicate that earnings seem to have bottomed out. Sectorally, there have been no negative shocks. “Raw material cost pressures remain benign, while for financials, asset quality has remained steady. There is comfort building around 15-16% earnings growth for large caps for FY27. The growth assumptions are higher for SMIDs at 20-25%,” she said.

On the macro front, Agrawal added that fundamentals remain sound. Heading into calendar year 2026, there are clear signs of an uptick in high-frequency macro indicators, supported by policy measures such as GST rate reductions, income tax cuts, and increased government spending. With stable fundamentals, consensus expects mid-teens earnings growth over the next two years.
 

Sectors to watch

At WhiteOak, she said that their investment philosophy is that outsized returns are earned over time by investing in great businesses at attractive valuations. To be considered great, a business should have superior returns on incremental capital, be scalable, and be well-managed in terms of execution and corporate governance.

For the all-cap portfolio, from a bottom-up perspective, she said they consistently find more opportunities in certain sectors. “Currently we see more promising prospects within private-sector financials, consumer discretionary, communication services, healthcare, and industrials,” she said.
 

What is a great business?

While defining what makes a great business, she said it is one that is well-managed, scalable, and consistently generates superior returns on capital. “When we find a company that possesses these attributes in good measure, it is crucial to value it logically and buy and hold it as long as there is a substantial upside to fair value, as implied by our proprietary cash-flow-centric OpcoFinco framework, rather than relying on commonly used multiples such as P/E or P/BV,” Agrawal said.
 

How to invest Rs 5 lakh?

When asked how an investor should deploy Rs 5 lakh at record market levels, she said the key is to consult a financial adviser to determine a comfortable equity allocation and stick to it over time. Avoid speculative trading or frequently changing your strategy based on short-term market moves or media noise. Prudent asset allocation remains essential for optimising long-term returns, as it helps balance risk and reward across diverse investment categories.
 

Mistakes to avoid

She believes that a common pitfall many investors fall into is the attempt to time the market. “We believe it is impossible to reliably forecast macroeconomic events and thus worrying about them is a waste of time. Such events hardly influence long-term future returns from equity markets, if at all,” Agrawal said, adding that it is best to make investment decisions based on bottom-up analysis.
 

FII flows

Foreign institutional investors (FIIs) have offloaded shares worth Rs 1.34 lakh crore in 2025 so far. She believes that FII flows are shaped by various global factors, including but not limited to relative valuations and growth trends in major economies.

“If earnings trajectory remains steady and domestic fundamentals continue to trend upwards, FII flows can revive,” she added.

Agrawal also believes that near-term FII flows can be cyclical, but large foreign institutions with dedicated allocations have always viewed India positively in the long run. The opportunity to generate outsized alpha remains the most attractive aspect of the investment case for India. One of the reasons for this alpha opportunity, she said, is that India has a vast, heterogeneous SMID-cap segment that is less well researched, offering strong alpha generation potential.