In an exclusive interaction with ET NOW, Rajat Sharma, Founder and CEO of Sana Securities, said that while PSU banks and financial services stocks have
led market gains, several underperforming sectors could see a shift in momentum as India heads into 2026, particularly information technology and consumption-focused stocks. Sharma said he has turned positive on the IT sector, citing low valuations, currency tailwinds and long-term structural drivers. He noted that sentiment around Indian IT companies has been weak due to concerns over US tariffs and possible hikes in H-1B visa fees, even though services are not directly impacted. Large IT companies derive a majority of their revenues, between 63 per cent and 83 per cent, from the US, Sharma said, with most earnings denominated in dollars. “Valuations for companies like Infosys and TCS are close to historic lows,” he said, adding that any recovery in revenue growth could lead to a sharp re-rating. A strengthening dollar would further support earnings, he added. Sharma said he is adopting a barbell approach within IT, combining large-cap names with select mid-cap companies focused on next-generation platforms. He highlighted Infosys for its cash position, dividend yield and ability to adapt to artificial intelligence through acquisitions. Among mid-caps, Sharma pointed to Intellect Design Arena, citing its efforts to develop an AI-ready core banking platform designed to replace legacy systems used by banks. On fintech, Sharma said he remains positive on Paytm for higher-risk portfolios, noting that the company is increasingly generating revenues from third-party product distribution such as credit cards and loan disbursements. He said Paytm’s wide distribution network positions it well as financial services increasingly shift towards platform-led models, though he clarified that he does not personally own the stock. Turning to consumption, Sharma said FMCG stocks have underperformed for the past few years but could see improvement as prices ease and the impact of GST changes becomes visible. He said allocations have been increased to Hindustan Unilever and Asian Paints, adding that Asian Paints has maintained market share despite rising competition. Sharma was also positive on Tata Capital, saying investors are “not realising how cheaply they are getting it” at current levels, citing group synergies and the addition of new financial services businesses over time. On defence stocks, Sharma said companies will deliver on execution, but valuations have run up sharply. He added that while the sector remains attractive over the long term, current valuations do not justify adding capital at this stage.
