Banking, consumption, and defence to drive index ahead, says Trust MF’s Mihir Vora

Mihir Vora, Chief Investment Officer at Trust Mutual Fund, said the market has already undergone a period of time correction, and that sector selection will be crucial now.

IT—one of the largest components of the Nifty 50—continues to face structural headwinds. According to him, the sector is unlikely to deliver much in the near term, making banking, consumption, government-led investments, and defence more important drivers for the index.

Large-cap IT companies are currently facing structural headwinds. Rising costs associated with

H-1B visas and slowing growth in core markets are making the traditional IT services model less sustainable, he said.

While banking remains attractively valued, credit growth has yet to pick up and is expected to revive only in the second half of the year.

Over the past few years, index performance was heavily skewed towards financials. He added, “Now we will have to depend a lot more on the other segments or the for the index to work. So, my guess is it is going to be a year in which stock picking will be more important than looking at the Index levels.”

Against this backdrop, Vora emphasised a preference for domestic themes, particularly sectors benefiting from government-led initiatives. Consumption, infrastructure, and public investments are expected to see strong tailwinds, offering more sustainable growth prospects compared with IT.

The rollout of GST 2.0, combined with the festive season and government encouragement, is anticipated to provide a boost to domestic consumption.

Sectors such as automobiles, airlines, and hospitality are likely to benefit from increased consumer spending, creating opportunities for investors looking to capitalise on these domestic growth stories.

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