- The short — leadership & laggards
- Sector drivers: what’s fueling moves
- Rotation map & risk flags
- Exit rules & quick charts
The short
- Leadership: Banks and Capital Goods continue to anchor breadth on earnings visibility and orderbooks.
- Improving: Autos, Pharma, and Power add participation as festive build and tariff clarity support prints.
- Cooling: IT and select Discretionary midcaps as deal ramp slows and valuations run ahead of revisions.
- Froth: Microcaps with weak cash conversion—avoid illiquid spikes around newsflow.
Setups reflect Monday open context. Validate with your live breadth and revisions trackers.
Sector drivers: what’s fueling moves
Banks & Financials
Retail credit momentum intact; asset quality stable. PSU banks benefit from capex-linked flows; private banks defend NIMs via CASA/fees.
Capital Goods/Industrials
Backlogs elevated; execution cadence supports margins. Watch order-to-revenue conversion and input spreads.
Autos
Festive channel build continues; PV strong, 2W patchy. Inventory weeks are the tell—trim if they rise beyond comfort.
Pharma
US launches + resilient India business lift profitability; remediation progress key where applicable.
IT Services
Budget caution persists; cost-takeout led deals favored. Prefer firms with visible large-deal TCV.
Power/Utilities
Demand strong; tariff clarity helps regulated names. Track PLFs, fuel linkages, and receivables cycles.
Rotation map
| Sector | Status | Primary driver | Risk flag | Positioning cue |
|---|---|---|---|---|
| Banks | Leader | Credit growth, asset quality | Deposit beta spike | Favor lenders with low wholesale mix; OCF/EBITDA > 0.8 |
| Capital Goods | Leader | Capex & execution | Input cost creep | Diversified orderbooks; avoid single-client dependency |
| Autos | Improving | Festive demand | Inventory overbuild | Track dealer weeks; trim > 6 weeks |
| Pharma | Improving | US launches, mix | US price erosion | Prefer stable GM, visible pipelines |
| IT | Cooling | Delayed ramps | Macro slowdown scare | Stick to cost-takeout leaders; demand TCV proof |
| Power | Improving | Tariffs, demand | Fuel bottlenecks | Blend regulated + merchant exposure |
Risk checks & exits
- Trim if a leader underperforms the Nifty by 5–7% over 4 weeks or net revisions flip negative.
- Reduce microcap beta when breadth deteriorates (% above 50-DMA and A/D line roll over).
- Size by liquidity; avoid crowded, low-float names into events.