Nifty may stay stuck in 24,000-26,000 band, stock picking key to returns: Ashwini Agarwal

The Indian equity market is currently stuck in a narrow trading band and requires a period of time correction due to expensive valuations, according to Ashwini Agarwal, Founder and Partner at Demeter Advisors.

“Nifty doesn’t really have a lot of room to move beyond this 24,000 to 26,000 range,” he observed, cautioning that a breakout is unlikely without a meaningful pickup in corporate profitability.

Despite the consolidation at the index level, Agarwal believes stock-specific opportunities remain attractive. He pointed to the sharp run-up in auto majors such as Maruti Suzuki and Eicher Motors but flagged that valuations in the segment are now “punchy.”

Instead, he sees greater potential in financials, particularly banks, NBFCs, and microfinance players, where both liquidity and growth prospects look stronger.

Export-oriented companies also figure in his list of preferred themes, with trade policy shifts potentially serving as a catalyst.

On the demand side, Agarwal highlighted that the government’s move to rationalise GST rates could provide a boost to consumption in the latter half of FY26.

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He also pointed to reasonably benign liquidity conditions and a potential easing of credit in the microfinance and unsecured lending spaces, which had seen brakes applied earlier in the year. Combining these factors, he anticipates a potential revival in consumer demand in the second half of the 2026 financial year.

External factors may also support Indian markets, with tariff negotiations between the US and India under watch. A reduction of current duties from around 50% to closer to 25% could improve competitiveness for exporters and offer fresh momentum for equities.

“If consumption demand remounts in a big way, and if the government pushes ahead with more reform, then you could look at a much higher Nifty in even a shorter period of time,” Agarwal added, noting the upside potential if supportive triggers align.

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