Sandip Sabharwal remains bullish on FMCG, retail and defence themes

Indian equity markets are positioned for a potential rally, supported by resilient consumer demand and strong corporate earnings, according to market expert Sandip Sabharwal.

In an interaction with ET Now, Sabharwal indicated that the current earnings season has been positive across the board, particularly for businesses that are consumer-facing, despite facing various cost pressures.

Sabharwal noted that the broader Indian economy is pretty well placed to sustain this momentum, although global cues and geopolitical stability remain critical factors for the markets to reach new record highs.

The Impact of Crude Oil and Geopolitical Tensions

The primary variable currently influencing market sentiment is the price of crude oil, which has remained elevated due to ongoing conflict in West Asia. Sabharwal suggested that Indian equities might have already achieved fresh record highs if these tensions had not pushed oil prices toward the $100 mark.

He believes a formal resolution to the tensions in West Asia would likely trigger a significant downward correction in oil prices, which would further boost investor sentiment.

So, once the actual deal happens, from the looks of it crude prices could crack pretty strongly

Sandip Sabharwal

While geopolitical developments have caused periodic spikes in crude prices, Sabharwal maintains that the underlying market structure is poised for a recovery if stability returns to the region.

Consumer Demand and Government Policy

The resilience of consumer demand has been a key driver in the current market landscape. Sabharwal attributed some of this stability to the Indian government’s strategic decision to avoid raising fuel prices.

This policy, combined with previous tax relief measures and GST cuts, has helped preserve the momentum of consumption across the economy.

Sabharwal observed that the result season is actually turning out to be quite good overall, highlighting the strength of consumer-oriented businesses even in a challenging cost environment.

Sectoral Performance and Market Recovery

Certain sectors are experiencing strong structural tailwinds that are independent of short-term geopolitical volatility. Specifically, the defence and aerospace sectors are seeing growth driven by increased spending.

Companies identified as benefiting from these trends include:

• Cochin Shipyard
• Bharat Forge

The Indian equity markets have already shown signs of recovery, gaining nearly 10% from the lows recorded in March 2026. Investors are now monitoring whether this rally can be sustained in the face of mixed global cues and the uncertainty surrounding West Asia.

Sabharwal warned that while the outlook is bullish, a renewed escalation in global hostilities or a fresh spike in commodity prices could create renewed pressure on both inflation and the equity markets.