Indian Markets’ Medium Term Risk Reward Improves; PL Wealth Suggests 60 to 65 Percent Equity Allocation for Aggressive Investors

New Delhi, February 16: As Indian equity markets navigate a consolidation phase, PL Wealth, the wealth management arm of PL Capital, has said that medium term risk reward dynamics are gradually improving, creating opportunities for calibrated portfolio allocation.

In its latest report, PL Wealth outlined differentiated strategies for aggressive and conservative investors, aligning asset allocation with evolving macro and policy signals.

Aggressive Portfolios May Raise Equity Allocation​

According to the report, investors with a higher risk appetite can consider allocating 60 to 65 percent of their portfolio to equities, reflecting improved medium term visibility.

Conservative investors, on the other hand, are advised to maintain a higher exposure to fixed income instruments, while keeping a tactical cash buffer of around 5 percent to manage volatility and seize opportunities as they arise.

The firm noted that Indian equity markets remain structurally strong despite ongoing consolidation, with medium term prospects supported by improving fundamentals.

Union Budget FY27 Signals Structural Growth Push​

PL Wealth said the government’s continued emphasis on infrastructure development, logistics expansion, manufacturing competitiveness, and digital capacity building in the Union Budget for FY27 reflects a structural growth blueprint rather than a short term cyclical stimulus.

The sustained focus on capital expenditure is expected to enhance corporate earnings visibility into FY27, particularly across infrastructure linked sectors, capital goods, defense manufacturing, electronics, and industrial supply chains.

Sectoral Outlook: Infrastructure, Defense, and Manufacturing in Focus​

In the medium term, sectors aligned with infrastructure, defense, logistics, capital goods, and select manufacturing themes are expected to remain well supported.

Export driven segments such as engineering goods, textiles, and gems and jewelry may benefit from improving trade visibility and ongoing global supply chain diversification, the report said.

At the same time, global uncertainties, currency fluctuations, and an ongoing earnings recalibration phase have tempered near term sentiment, even as fiscal momentum, macro stability, and improving investment visibility provide an underlying cushion.

Investor Positioning to Track Policy Signals and Trade Engagement​

The report said investor positioning is likely to adjust dynamically to domestic policy cues and emerging clarity around the India US trade engagement, which could influence export oriented and capital intensive industries.

Investment preference, it suggested, should tilt toward companies with strong balance sheets, credible execution track records, and sustainable earnings visibility.

Inderbir Singh Jolly, CEO of PL Wealth Management, said Indian markets are currently absorbing global volatility and an earnings recalibration phase, but domestic fundamentals remain robust.

PL Wealth added that financials, automobiles, industrials, and IT services have shown relative resilience, while consumer facing and select banking segments have experienced near term headwinds.

As government spending gathers pace and order inflows translate into revenue growth, the earnings recovery is expected to broaden into FY27, providing the fundamental trigger for a more durable market upcycle.