Equitree’s value strategy shines as Indian markets bounce back sharply on easing trade tensions
India has taken the lead in the global equity market recovery, with the Nifty 50 and Sensex posting four straight sessions of gains. The benchmarks surged by 6.5 percent and 6.4 percent, respectively, buoyed by a mix of domestic macro stability and improving global cues. The market comeback follows a difficult phase marked by volatility stemming from geopolitical and trade-related uncertainties.
Domestic Strength and Policy Support Drive Market Momentum
The turnaround in sentiment was driven largely by domestic factors. Financial stocks emerged as the biggest contributors to the rally, underpinned by the Reserve Bank of India’s back-to-back repo rate cuts. These cuts came in response to a cooling in retail inflation, thanks in part to declining vegetable prices. The improved inflation outlook has bolstered expectations of another possible rate cut in the near term—fueling optimism in rate-sensitive sectors.
Banking heavyweights such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and State Bank of India saw significant buying interest as investors bet on a supportive interest rate cycle and resilient loan growth trends.
Trade Tensions Ease Slightly, Supporting Risk Sentiment
Globally, the easing of trade war rhetoric also offered respite. US President Donald Trump’s rollback of some previously announced tariffs, along with a temporary pause in new levies, helped calm investor nerves. While trade tensions between the US and China continue to cast a shadow over global markets, the recent developments marked a break in the aggressive posturing, paving the way for renewed risk appetite among global investors.
This combination of supportive domestic policy measures and a relative cooling of external risks has given Indian equities the room to rebound from recent lows. The result: strong inflows from both retail and foreign institutional investors, propelling markets upward and restoring confidence.
What Should Investors Do Now?
Equitree’s Portfolio Outlook: Staying Focused on Fundamentals
Equitree Capital continues to rely on its deep value, fundamentals-first philosophy. According to the firm, while markets may be driven by sentiment in the short term, long-term outperformance comes from backing quality businesses through economic cycles.
“In FY25, despite the noise and intermittent market euphoria, we stayed the course—focusing on business fundamentals over headlines,” Equitree noted in its portfolio commentary. The fund manager avoided crowded trades and added to high-conviction bets, while also selectively investing in new opportunities in telecom EPC and the lubricants segment.
The firm remains particularly bullish on manufacturing, infrastructure, engineering, and emerging consumption themes—sectors they believe are poised to benefit from India’s structural growth trajectory.
The Alpha Opportunity in Emerging Leaders
Equitree sees long-term alpha generation in companies within the ₹500–5,000 crore market cap bracket—businesses that have strong balance sheets, competitive moats, and are still underappreciated by the broader market.
Their portfolio currently trades at just 13 times FY26 earnings, with a forecasted profit growth of 25–30 percent. The fund follows a low-churn strategy, holding a concentrated portfolio of 12–15 names for the long haul.
With easing trade tensions and a supportive macro backdrop, the Indian market’s recovery has been swift and broad-based. But Equitree’s approach stands apart—not just for capitalising on the rebound, but for sticking to its strategy through cycles. As the market continues to digest global and domestic developments, disciplined, fundamentals-driven investing remains the key to sustained outperformance.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
