Speaking to ET Now, Mehra said that while some developments like GST reform or global trade tariffs directly impact corporate earnings, much of the news cycle is temporary. “For investors, there is just too much noise. Of course, certain events affect revenues and margins, like crude price swings or GST, but a lot of other things fall into the ‘this too shall pass’ category,” she explained.
Consumption theme gathers strength
According to Mehra, consumption is steadily recovering from the post-pandemic slump, aided by lower inflation and easing crude and food prices. “Consumption has been picking up for about a year now from the absolute depths of 2023–24. Inflation has come down overall, and crude is cheaper, which benefits many industries,” she said.
First Global has been overweight on auto components since early 2024, along with pharma and healthcare. In 2025, the firm also increased exposure to FMCG stocks. “We are overweight FMCG now, although stock selection within the sector matters. Some names we exited, some we added, but overall the theme looks strong,” Mehra noted.
She expects GST changes to give a further boost, though short-term disruption may delay earnings visibility. “I was expecting consumption-led earnings growth in the July–September quarter, but with GST-related disruptions, that might shift to the third quarter,” she said.
Market triggers: Hard to predict
On whether the market can break out of its current range, Mehra cautioned against overemphasizing triggers. “Narratives always follow what the market does. If you wait for a clear trigger, you will often miss the move,” she said, citing the post-Covid bull run as an example where liquidity drove gains despite weak fundamentals.Her advice remains straightforward: stay invested according to one’s equity allocation. “If you were waiting for a correction to invest, you’ve already missed a 3,000-point rally in the Nifty since February,” she pointed out.
Gold, silver, and global diversification
On commodities, Mehra advised investors to keep a modest allocation to gold and silver as part of long-term diversification. “Gold and silver should be part of asset allocation, but not something like 25% of your portfolio. Never chase an asset class just because it has recently done well,” she said.
Silver, she added, has both industrial and precious metal appeal, particularly due to its role in solar cells. She also highlighted the importance of overseas diversification. “The euro has risen 15% against the rupee this year alone. The US is not the globe—investors must look at global opportunities beyond the US,” Mehra said.
Caution on government-linked sectors
While themes like defence, infrastructure, and power are popular, Mehra urged caution. “Big government orders look positive in headlines, but execution risk and delayed payments are constant issues. Margins are slim as contracts go to the lowest bidder, and working capital often gets stuck,” she explained.
She cited examples like the Bandra-Worli Sea Link project, where the contractor ran into financial trouble due to delayed payments. “Investors must look beyond order books and factor in risks of cost overruns and cash flow delays,” she said.
Still underweight on financials
On financials, Mehra said First Global has a relatively smaller exposure despite the sector’s heavy weight in benchmarks. “We are still underweight, though less underweight than before. After years of underperformance, we added some positions in 2025,” she said.
However, she flagged risks around rising household debt and slowing credit growth. “Household debt indicators are not very healthy, and savings rates are under pressure. Public sector banks did better than private ones last quarter, but risks remain,” she cautioned.
Balanced but focused approach
Mehra recommends that investors should maintain discipline and avoid reacting to short-term news. “No theme lasts forever, and no one has visibility beyond a couple of years. But staying invested, diversifying globally, and not chasing fads remain the best approach,” she said.
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