“Investors are still uncertain, especially with FII selling and promoter exits in block deals. The market is waiting for a trigger to break past highs or fall sharply,” Mehta said. “We could see a 6-7% rally or a correction, depending on news flow.”
On midcaps, Mehta is positive. “Alpha is coming from midcap stocks. Investors should focus on differentiated businesses or innovative ideas. In the Nifty 50, only 10-12 stocks offer double-digit growth, so midcaps are key for higher returns.”
Discussing IT, Mehta noted, “Despite strong tech trends, AI hasn’t boosted IT services yet. A trading rally of 8-10% is possible, but long-term prospects remain uncertain.”
On defence stocks, he said, “The sector is well-discovered and reasonably valued. If investors aren’t exposed, corrections are a chance to buy. Otherwise, most defence stocks are a hold.”
Highlighting sector-specific opportunities, Mehta added, “Across sectors, look for companies with innovative business models—like CarTrade in autos, Medi Assist or PolicyBazaar in insurance, and niche players in travel and construction. These could outperform traditional companies.”