• Macro and currency risks: Escalating US-Iran tensions and supply blockades have driven crude prices sharply higher, expanding India's import bill and current account deficit, which is putting significant pressure on the rupee.
• Market consolidation outlook: Indian equity markets are expected to remain range-bound and consolidate over the next 6 to 12 months, as market valuations, particularly in mid and small caps, remain above historical averages.
• Stock-picking approach: Investors should focus on bottom-up stock selection across sectors like banking and IT rather than chasing broad themes, as many popular themes have already priced in future growth.
• Earnings and consumption trends: Fourth-quarter earnings have positively surprised due to GST cuts generating $20 to $22 billion in annual household savings, though sustained high oil prices could soften consumer spending over the next 3 to 4 months.