Investment Ideas Note
November 2025 by Wallet Wealth
2025
October marked a decisive shift in sentiment, driven by robust earnings prints,
strong domestic flows, and improving global risk appetite as U.S. inflation
moderated and Fed commentary turned slightly dovish.
Indian
macro remained resilient with healthy tax collections, stable crude oil prices,
and steady corporate credit growth. Manufacturing PMI held expansionary
territory, while capex-linked sectors outperformed amid continued policy
support.
Market
Review
Share
valuations remain elevated in select segments (e.g., small-cap and thematic
pockets), but earnings visibility and domestic liquidity continue to provide
downside cushioning. Rotation into financials, industrials, and export-linked cyclical
supported the rally.
Major
Index Performance – October 2025
|
Index
|
1 Oct 2025 |
31 Oct 2025 |
Change |
|
BSE
Sensex |
80267
|
83,938
|
+4.55% |
|
BSE
Midcap |
44,916
|
47,044
|
+4.73% |
|
BSE
Small-Cap |
52,915
|
53,876
|
+1.81% |
Nifty
Monthly Returns (%):
|
Index
|
October Return |
|
Nifty
50 |
+4.56%
|
|
Nifty
Midcap 150 |
+2.27%
|
|
Nifty
Bank |
+5.77%
|
A
brief rally driven by global equity support and trade optimism moderated toward
month-end due to external trade concerns and valuation caution. Banking and
PSUs outperformed on credit traction and supportive monetary policy.
FII
& DII Flows – October 2025
|
Category |
Equity
(₹ Cr) |
Debt
(₹ Cr) |
Net Flow |
|
FII |
+11,049 |
+3,486.19
|
+16,041.70 |
|
Mutual Funds (DII) |
+17,778 |
- 6,035 |
+14,535 |
Both
FIIs & DIIS were positive investors in Equity during October whilst the
DII's were negative in Debt. Domestic flows remained the positive, supported by
strong SIP momentum.
Macro
Economic Dashboard – India (as of October 2025)
|
Indicator |
Latest Reading |
Trend / Insight |
|
GDP Growth (FY25E) |
6.8% |
Strong domestic demand;
manufacturing & exports improving |
|
CPI Inflation |
5.0% |
Moderating food inflation;
RBI maintains vigilance |
|
Core Inflation |
3.8% |
Benign core keeps policy
path stable |
|
Repo Rate |
6.50% |
RBI on extended pause;
stance: withdrawal of accommodation |
|
PMI Manufacturing |
55.5 |
Solid expansion; capex
& order book strength |
|
PMI Services |
57.0 |
Domestic services momentum
robust |
|
GST Collections
(Oct '25) |
₹1.7 lakh cr |
Consistent strength,
reflects healthy consumption/formalization |
|
Forex Reserves |
$650 bn |
Comfortable reserve cover;
supports currency stability |
India remains a
growth outlier, though export-linked sectors and oil-intensive industries may
face near-term pressure.
Why We Stay
Constructive on India
1. Low
FII Ownership (17–20%) – Good Opportunity
2. Valuation
moderation: Nifty forward P/E ~19–20x from ~24x peak
3. Policy
tailwinds: GST 2.0, infra push, PLI momentum
4. Earnings
visibility: 12–15% EPS growth outlook
5. Fastest-growing
major economy with sustained capital inflows
India
vs EM & DM Market Cap-to-GDP Comparison
|
Region
/ Country
|
Mcap-to-GDP (Approx.)
|
Comment |
|
India |
109
-112% |
Above
LT avg; supported by earnings momentum & domestic flows |
|
US (DM) |
150
-170% |
Historically elevated;
mega-cap tech dominance |
|
Eurozone (DM) |
55–65% |
Lower equity penetration;
bank-heavy system |
|
Japan
(DM) |
110
-125% |
Corporate reforms,
improving shareholder focus |
|
China
(EM) |
55–65% |
Structural slowdown,
regulatory overhang, lower market cap base |
|
Brazil
(EM) |
55–70% |
Commodity-linked cycles;
volatile flows |
|
South Africa (EM) |
250% |
Skewed by large global
commodity/duallisted firms |
Key
Takeaways
• India
trades above EM peers but below US, reflecting growth premium and deepening
financial markets.
• Higher
formalization, SIP flows, and earnings cycle justify elevated multiple vs EM
basket.
• Discipline
on valuations & staggered deployment remains key due to premium
positioning.
Investment
Strategy – Our View
Equity
Allocation View
• Market-cap-to-GDP
~125.28% → avoid lump-sum, stagger over 20–24 weeks
o Interpretation: Markets remain above historical average but
justified by earnings strength, formalization, and financialization of savings.
Valuations require disciplined & staggered deployment.
• Preferred themes:
o Large-cap
& Hybrid funds for stability
o Banking
& Financials, Business Cycle → tactical exposure
o IT & Digital →
Contrarian Approach
• Avoid fresh small-cap
allocation unless 7+ year horizon
Debt Market
– October 2025
• G-Sec: 10Y benchmark around 6.53% at Oct close; early-Nov eased towards ~6.50%.
• Curve: CCIL indicative yields show ~6.52% (9–10Y G-Sec bucket), ~7.14% (10Y SDL), ~7.49% (15Y SDL). Spreads remain attractive for high-quality
state/PSU paper.
• Context: RBI liquidity operations earlier in the year
and stable policy stance keep duration risk manageable; FPI bid in debt has
stayed supportive.
Debt
Allocation View
• <1
Year: Money Market / Ultra-Short Funds
• ~3
Years: Banking & PSU Debt, high-quality corporate bonds
• Avoid
Credit Risk segment due to volatility
Contact Information
S.Sridharan, Founder, https://www.walletwealth.co.in/
For portfolio
guidance, contact advisor at 9940116967
Wallet Wealth LLP |
SEBI Registered Investment Advisor
2nd Floor, No.8A, 2nd Main Road, Nanganallur, Chennai – 600 061 Ph: 044-48612114
Email id: sridharan@walletwealth.co.in
You can contact Mr.S.Sridharan for all types of investments including
mutual fund investment, medical insurance, and life insurance.
Read articles written by Mr. S. Sridharan in Nanayam Vikatan, a
leading personal financial management magazine.
https://www.vikatan.com/author/855-sridharan-s
Disclaimer
This
document is confidential and intended solely for clients. Information is
believed reliable but not guaranteed. Views are subject to change without
notice and do not constitute investment advice without consultation.
