According to Gaurav Bhandari, CEO of Monarch Networth Capital, the upcoming budget is likely to be reform-oriented and distinctly FII-friendly, with a focus on improving India’s attractiveness as an investment destination.
Foreign investors have been net sellers over the past few years, believing the government may introduce measures such as tax relief, regulatory clarification, or policy reforms aimed at stemming capital outflows and strengthening long-term investor sentiment.
This approach, he notes, can play a crucial role in boosting confidence in Indian markets at a time when domestic flows drive much of the market’s stability. Edited quotes –
Q) December quarter earnings – what are your expectations?
A) December quarter earnings should be decent but not spectacular. On an overall basis, we expect Nifty’s revenue to grow by around 7-9% for the quarter. While some pockets like banks and select industrials may show resilience, overall revenue growth will moderate.
Q) Gold and silver were top performers – how should investors play the precious metals theme in 2026?
A) Geopolitical tensions, central bank actions, and investor sentiment, rather than internal fundamentals, have made price volatility increasingly speculative assets.
At current levels, the risk-to-reward ratio does not look very favorable. Investors should approach precious metals with caution, use them mostly as a hedge or strategic allocation, and avoid aggressive positions based on recent price movements.
Q) Expectations from Budget 2026?
A) We expect a strong reform oriented budget. In particular, the government is likely to focus on measures that improve investor sentiment, including potential tax relief or clarifications for foreign institutional investors (FIIs).
With steady FII outflows over the last 3-4 years, we believe the government will actively try to stem capital flight and increase India’s attractiveness as an investment destination.
Q) SIP inflows as a buffer against FII sell-offs – Outlook to 2026?
A) Domestic SIP inflows have been a key constant for Indian equities and we expect this trend to continue in 2026.
Monetization of household savings, increased investor awareness and long-term wealth creation themes should keep SIP flows strong and consistent, providing a buffer against any intermittent overseas sales.
Q) Rupee at 90 – are we heading towards 100 per USD? Should investors be worried?
A) We don’t see rupee depreciating to 100 per USD. The government and RBI are likely to take strong corrective measures especially to boost exports and manage currency volatility.
In fact, we expect the rupee to strengthen to the 87 level in the next 45-60 days. While near-term volatility may persist, there is no cause for panic from an investment standpoint.
Q) Which sectors are likely to do well in 2026?
A) We continue to be positive on PSU banks driven by improving balance sheets, good asset quality and attractive valuations.
Defense is another key sector we like, supported by strong order books, indigenization and sustained government spending. Investors may consider increasing weightage in these sectors for medium-to-long-term portfolios.
Q) India’s growth outlook amid geopolitical risks and trade wars?
A) As per our estimates, the Indian economy should grow in the range of 7.4-7.6% in the current financial year.
While geopolitical concerns and trade tensions are key, domestic consumption will continue to be the backbone of Indian growth.
India’s structural strengths, demographic advantage and policy consistency provide confidence that growth momentum can be maintained despite global uncertainties.
(Disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of Economic Times)
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