• Foreign portfolio flows: FPI allocations have dropped from a peak of 21% down to 11–12%, but the trend is reversing with increased inward inquiries and fresh capital beginning to flow back into India.
• Consumption and credit: Consumer and automotive demand is rebounding strongly, driven by indirect GST rate cuts from 28% to 18% alongside an acceleration in credit growth from 9% to 19%.
• Earnings and index: Following a period of time-wise correction to 20x PE, corporate earnings growth is projected to remain sustainable in the 12–13% range, presenting an asymmetric risk-reward of 2,000 points downside versus 10,000 points upside over 2–3 years.
• Financials and capex: Banks, NBFCs, and asset management companies offer attractive long-term value, positioned to benefit from the ongoing consumption cycle and an upcoming government-led capex boom in defense and infrastructure.