Expert view: Expect broad-based consumption recovery; ITC, HUL, Britannia top picks, says Sandip Raichura of PL Broking

Expert view on markets: The Indian stock market has been on a downtrend driven by concerns around US President Donald Trump’s tariff policies, weak local economics, strengthening US dollar and foreign capital outflow. Sandip Raichura, CEO of Retail Broking and Distribution and director at PL Broking and Distribution, believes SIPs are the ideal approach retail investors should follow when investing in stocks. In an interview with LiveMint, Raichura said there could be a broad-based recovery in consumption, and his top picks in this space include Britannia Industries, Nestle, HUL and ITC. He also shared his views on the sectors he is positive about and the strategy for the mid and small-cap segments. Here is an edited excerpt of the interview.

What is the biggest reason behind the recent sharp selloff in the Indian market?

The Union Budget was reasonably okay from a consumption point of view. Given the fiscal constraints, it lacked any major triggers – and justifiably so.

Consequently, the incentives were insufficient to fight the global and domestic macroeconomic headwinds.

Concerns around potential tariff hikes, weak local economics, a strengthening US dollar, and a relatively strong level of crude led to the continuation of the four-month-old weak trend.

Additionally, Indian equities, having outperformed global peers over the past few years, now appear expensive globally. This has resulted in a lack of FII (foreign institutional investor) buying, further weighing on sentiment.

Until some green shoots appear or positive macroeconomic data emerges, the markets will likely remain under pressure.

How should retail investors invest in this market?

After Nifty’s recent correction of nearly 13 per cent, a further downside of 5 per cent may or may not happen. This gives retail investors excellent opportunities to pick quality stocks that have corrected significantly.

Many stocks that are core to India’s emergence as a strong economy are down nearly 40 per cent from their highs and are available at less than 30 times PE (price to earnings ratio) FY25.

Further, certain sectors, such as FMCG, have remained relatively stagnant and could see a revival as consumption grows.

One needs to have confidence in India’s potential and occasionally take bites of attractive stocks.

Also, SIPs remain the ideal approach, as market cycles will always bring periodic volatility.

Retail investors should continue SIPs in diversified equities, a multi-cap fund, or even a carefully selected portfolio of high-quality stocks to benefit from long-term compounding.

Which sectors look attractive to you at this juncture and why?

Post-budget, our research suggests a rebound in capital expenditure trends and a pickup in domestic demand. The hope is that such a broad-based economic recovery will support markets and provide double-digit returns in the calendar year 2025 (CY25).

The Budget also incentivises domestic manufacturing, energy transition, and urban development while ensuring compliance-driven revenue growth without new tax burdens.

This is a positive, and one may look at select plays in renewables to capitalise on this opportunity. Apart from that, we recommend investments in sectors including Consumers (staples and discretionary), travel and tourism, EMS (electronics manufacturing services), hospitals and pharma, capital goods and select auto stocks.

Gold’s rise this year is astounding. Can this trend continue? Should we increase our exposure to gold?

Gold has always been a crucial asset for diversification, offering both a hedge against inflation and a store of long-term value.

Hence, we have always maintained that investors should have at least 5 per cent exposure to gold in their portfolio.

Our bullish stance on the yellow metal has been maintained since it was at $2,300 levels, and the prices are now almost 30 per cent higher.

This surge has been driven by currency volatility, geopolitical tensions, and supply chain disruptions.

As the uncertainty continues, gold may see further upside, though some technical corrections along the way are expected.

Additionally, demand has risen from central banks, including China. We note that the setting down of trade issues and conflicts may puncture the rally at some stage, but the trend remains positive.

In light of the recent budget and an RBI rate cut, what is your view on consumption as a theme? How should investors see it?

The restructured personal income tax regime raises the nil tax slab to ₹12 lakh and rationalises the slabs. This is likely to enhance disposable incomes and revive urban consumption.

Meanwhile, sustaining rural demand is targeted through increased Kisan Credit Card limits, direct farm support, and rural infrastructure spending.

Measures have also been introduced for the gig workers (online delivery workers). They will be provided with identity cards, registration on the e-Shram portal, and healthcare – and this is likely to assist nearly 10 million gig workers.

A combination of these factors could lead to broad-based consumption recovery. Our top picks in this space include Britannia Industries, Nestle, HUL and ITC.

How do you see the Q3 earnings of India Inc.? What were the noticeable upgrades and downgrades?

Profits in Q3 2025 remained subdued, continuing a trend that has persisted for the past four quarters. 

However, the earnings season results were not entirely unexpected, given the host of factors affecting demand. Profit after tax (PAT) growth stands at around 15 per cent, with revenue growth at around 5 per cent, which, under the circumstances, is still not bad. There is potential for a surprise on the upside in Q4.

What should be our strategy for the mid and small-caps at this juncture?

We believe that selective unleveraged midcaps could be bought into from time to time, especially in core non-cyclical or secular themes. 

Small caps require a lot more research as the emerging business scenario is likely to remain challenging, and the financial performances may be polarized. 

The era of easy money that we saw in the post-COVID period—fuelled by monetary easing and flow momentum—may be over. 

We advise investors to research carefully and exercise caution. Small caps are best entered through multi-cap or flexi-cap equity funds.

Read all market-related news here

Read more stories by Nishant Kumar

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.