Global brokerage firm Jefferies has said that India remains a strong candidate for long-term wealth creation despite recent market underperformance and global headwinds.
In its latest report, Jefferies highlighted that small- and mid-cap stocks present strong growth opportunities, even as large-cap counters show limited upside. The automobile sector, in particular, is expected to benefit significantly from the GST cut, with demand projected to rise after September 22. Auto stocks have already reacted positively and are likely to sustain momentum.
“The Indian stock market is slowly regaining momentum, supported by expectations of an earnings boost from the recently approved GST 2.0 reforms,” the brokerage stated.
While the Nifty has declined 0.65 per cent over the past year and small- and midcap indices have also corrected, Jefferies noted that easing earnings downgrades, reasonable valuations, and a sharp decline in India’s valuation premium compared to other emerging markets are setting up conditions for stronger performance ahead.
The brokerage expects India’s corporate earnings to grow at 10 per cent annually between FY26 and FY27. On strategy, it advised investors to avoid extreme bets, pointing out that “compounders” have delivered the best results this year. Jefferies also sees potential in laggard stocks and multibaggers capable of generating strong alpha.
Meanwhile, regulatory changes by SEBI and flat market returns have drawn renewed interest from high-net-worth individuals in specialised investment funds (SIFs), which allow unhedged short positions of up to 25 per cent of net asset value.
Jefferies said it is introducing new long-short and short-only strategies within this space, using factors such as momentum, earnings revision, free cash flow, valuations, and company size.
-IANS