Devang Mehta, Deputy MD & CIO-Equity at Spark Capital Private Wealth, says the broader Indian equity markets currently offer better opportunities than the Nifty index, and remains positive on India's earnings outlook despite ongoing geopolitical risks.

In comments to CNBC-TV18, Mehta said he favours discretionary consumption, capital expenditure (capex)-linked plays, and financial services as the sectors best positioned going forward. His view is that stock-picking outside the benchmark index is likely to present more attractive entry points than the large-cap heavyweights that dominate the Nifty.

The Nifty 50 is India's benchmark equity index on the National Stock Exchange (NSE), comprising 50 of the country's largest listed companies across sectors such as financials, energy, information technology and consumer goods. In contrast, the "broader market" generally refers to mid-cap and small-cap segments, which are tracked by indices such as the Nifty Midcap 150 and the Nifty Smallcap 250. Mid- and small-cap stocks are typically more sensitive to domestic economic cycles and carry higher volatility than large caps, a trade-off investors weigh when seeking returns outside the benchmark.

Mehta's optimism on earnings comes even as investors continue to weigh geopolitical risks that have weighed on global and Indian markets in recent sessions. India remains one of the world's fastest-growing major economies, and domestic consumption along with government-led infrastructure spending have been key drivers of corporate earnings growth in recent years. His remarks reflect a broader debate among Indian market participants about valuation gaps between large-cap index heavyweights and mid- and small-cap segments, where analysts have periodically flagged divergences in relative valuations.

His sector preferences align with themes that have been prominent in Indian market commentary: rising discretionary consumption among India's expanding middle class, sustained public and private capex in infrastructure and manufacturing, and steady credit growth supporting financial services companies. Government initiatives such as the National Infrastructure Pipeline and production-linked incentive (PLI) schemes have been cited by policymakers as supports for capex-linked demand across these sectors.

The comments were made in a CNBC-TV18 markets video interview.

Source: CNBC-TV18