Asked about the outlook for the coming week, Saigal was candid about the limitations of short-term forecasts. “I can flip a coin and say that markets are headed this way or the other for the week but it will be of very little value to your viewers if I was to give you a prognosis on that. However, what would be of value to the listeners and also to commentators is what is the direction markets are likely to take over a longer-term perspective, say one to three to five years and what are the ingredients of this move.”
From that longer-term lens, Saigal remains constructive on India. He pointed out that markets are ultimately driven by growth and macro stability, and on both counts India appears well placed. While the current financial year has been relatively muted on earnings, the outlook improves meaningfully beyond that. “While FY26, the ongoing year, was somewhat of a weak year as regards earnings growth where we are seeing somewhere close to 8% earnings growth for Nifty, that is the expectation, but going forward that is in FY27 Nifty growth is estimated to be somewhere in the region of 15% to 16%.”
That expected acceleration in earnings, combined with a stable macro backdrop, strengthens the case for Indian equities over the medium to long term. Saigal highlighted that inflation is under control and real GDP growth has remained robust over the past two quarters. Taking these factors together, he believes the market may have already laid down a base. “Now, take all of that together and it does look like this year having formed a base in the markets India is positioned well for a up move over the next few years in the longer term I mean and that will hold for individual stocks as well.”
He also noted that a meaningful correction has already played out across many segments of the market. Several large-, mid- and small-cap stocks have seen both price and time corrections, creating a more favourable setup as growth accelerates. “And when you combine that with accelerating growth, that is a nice setup and our judgment is that for the long term India looks very attractive.”
On sectoral opportunitiesSaigal said the answer depends on the investor’s objective. For institutional investors focused on outperforming the index, relative value matters. “If you are an institutional investor who is looking to beat the index as that is his KRA, then clearly there are certain segments of the market where value has emerged and on a relative basis those segments may do well.”
In that context, he believes IT stands out. “For instance it, IT has consolidated over a long period of time and earnings downgrades also seem to have peaked. So, from here risk-reward looks favourable and on a relative basis, IT may outperform.”However, for investors seeking absolute returns and outsized gains, Saigal sees opportunities in other pockets of the market. Metals are one such area, having gone through a prolonged phase of consolidation. “Metal prices have gone nowhere over a two-three-year period and if the same trend is to play out even in other metals, you could see upsides there as well. Valuations again remain quite reasonable there.”
He also pointed to renewable energy, defence, capital goods and discretionary consumption as segments worth watching. According to him, discretionary consumption in particular has seen little movement since the pandemic. “If consumption is to pick up because of various aspects, GST rationalisation, tax correction, your 8th Pay Commission revision, and other aspects, then this is a segment which could see upsides.”
Turning to smaller lenders and microfinance companies, Saigal acknowledged the pain the sector has endured over the past several quarters. “Many of these microfinance companies have faced tremendous pressure over the last six to eight quarters, that is the nature of this business that you will see spurts of growth and then spurts of pain on the asset quality side.”
He believes much of that stress may now be behind the sector, using a Hindi proverb to illustrate the point. “There is a saying in Hindi hathi nikal gaya puch reh gayi, which is something that you may be witnessing in this space where most of the pain on the asset quality is behind us and maybe one or two quarters of pain is ahead of us.”
Crucially, he said valuations already reflect a lot of the bad news. “In many instances that is in the price already and which is why downsides may be limited from here and in case this issue was to abate as we move ahead, then the room for appreciation in valuations can be quite significant.” As a result, he believes the risk-reward in several microfinance and SME finance companies now looks attractive.
While short-term market movements may remain unpredictable, Saigal’s message was clear: for investors willing to look beyond near-term volatility, India’s growth trajectory, improving earnings outlook and selective valuation comfort continue to offer compelling opportunities.
What is Saigal Capital’s investment beliefs?
Wikipedia‑style Context
Anshul Saigal, founder and chief investment strategist of Saigal Capital, has emerged as a prominent voice on India’s equity markets. A Chartered accountant by training, Saigal began his career in the early 2000s with a series of roles in audit, corporate finance and asset management before establishing Saigal Capital in 2014. The boutique research firm quickly became known for its macro‑driven, long‑term orientation, contrasting the short‑term “trading‑floor” approach that dominates many indian brokerage houses.
Saigal’s market thesis revolves around three core pillars: (1) enduring earnings acceleration, (2) macro‑economic stability, and (3) sector‑specific valuation cycles. In a series of interviews throughout 2023‑2024, he repeatedly warned against over‑emphasis on weekly market movements, arguing that the true value for investors lies in understanding where the Indian market could be heading over the next one‑to‑five years. His projections for FY27‑FY28 suggest that Nifty earnings could climb to 15‑16 % annually, a sharp uptick from the modest 8 % growth seen in FY26.
Saigal also maps out “relative‑value” opportunities across sectors. He identifies facts technology (IT) as a defensive, earnings‑rebound story; metals as a re‑emerging commodity play after a prolonged consolidation; and newer themes such as renewable energy, defense, capital goods and discretionary consumption as catalysts for growth once structural reforms (e.g., GST rationalisation, tax correction, 8th pay Commission) take effect.the micro‑finance and SME‑finance segments,though historically volatile,are highlighted as having already priced in most of their downside risk,presenting a favourable risk‑reward profile for long‑term investors.
