Remain positive about Indian equities; market breadth set to improve, says Quant MF’s Sandeep Tandon

Tandon, who is CIO of Quant Mutual Fund, said the growth was powered by firm manufacturing output, solid expansion in services and resilient private consumption.

India’s domestic economy maintained its strong momentum in the September quarter, expanding 8.2% year-on-year in Q2 FY26, the fastest pace recorded in six quarters. This surpassed consensus expectations as well as last year’s 5.6% growth rate, reinforcing India’s position as one of the world’s fastest-growing major economies despite global uncertainty and the impact of recent US tariffs, according to Quant MF's Sandeep Tandon.

In his latest monthly market note, Tandon, who is CIO of Quant Mutual Fund, said the growth was powered by firm manufacturing output, solid expansion in services and resilient private consumption. Festive-season demand and a buildup in production ahead of tariff changes also helped lift activity. He added that full-year real GDP growth is now poised to exceed 7% in real terms, highlighting the economy’s broad-based resilience heading into the second half of FY26.

Tandon also highlighted that there has been a significant improvement in the government’s fiscal position. Provisional data up to November 10, 2025, show that net direct tax collections stand at around Rs 12.92 lakh crore, representing a 7% year-on-year rise. Additionally, higher corporate and non-corporate tax receipts, coupled with a sharp decline in refunds, have provided the exchequer with additional fiscal comfort. According to him, this increases the likelihood of meeting or even surpassing full-year revenue targets, strengthening the government’s capacity to maintain budgetary balance and continue with capital expenditure commitments.

Financial markets reflected similar resilience in November. Indian equities returned 1.9%, comfortably outperforming the S&P 500 while displaying lower volatility. Gold rebounded strongly, rising 4% and recovering 6% from its monthly lows. Bitcoin, by contrast, fell more than 16%, although it managed to claw back nearly 14% of that decline by month-end. Tandon reiterated his constructive view on Indian equities, noting that December and January have historically been seasonally strong months. He pointed out that Quant’s earlier prediction that the second half of calendar year 2025 would outperform the first has materialized, with the Nifty, Bank Nifty and Nifty Midcap indices all touching lifetime highs.

Looking ahead, Tandon expects the rally to broaden. He believes the Nifty Small Cap index is likely to join the other benchmark indices in reaching new all-time highs. This optimism, he says, is supported by several structural and cyclical developments, including a potential reversal in the long-term depreciation trend of the Indian rupee, signs that foreign portfolio investor selling is peaking out, early indications of passive inflows returning to emerging markets, and the positive economic effects expected from the government’s recent relaxations in income tax and GST norms. He also noted that the interest-rate and liquidity environment remains conducive to banking and lending activity, while the September quarter likely marked the bottom of the corporate earnings cycle, setting the stage for steady improvement.

Despite bouts of investor frustration in recent months, Tandon remains upbeat. Quant’s portfolios continue to be biased toward large-cap stocks, though exposure to select mid- and small-cap names has been increased across equity and hybrid schemes. He remains particularly positive on sectors such as infrastructure, NBFCs, insurance, banks, hotels, pharmaceuticals, consumption and telecom, and noted that the firm has recently added exposure to private-sector banks.