Market poised for next leg of rally as PSU banks, telecom and value retail shine: Neeraj Dewan

Market Outlook - The Indian stock market is poised for growth as various sectors, including PSU banks, telecom, value retail, and cement, show renewed strength. Corporate earnings are consistently improving, indicating a potential broader market rally [1][12]. Telecom Sector - The telecom sector is highlighted as a strong structural story, with Bharti Airtel showing impressive subscriber additions, rising Average Revenue Per User (ARPU), and efficiency gains. Jio's upcoming listing is expected to be a significant trigger for Reliance Industries, while Vodafone Idea faces challenges due to ongoing subscriber losses [2][12]. Retail Sector - The value retail and fashion segments are experiencing a resurgence after two years of underperformance. The October-December quarter is anticipated to be strong for retailers, driven by festive demand, GST benefits, and improved consumer sentiment. Despite elevated valuations in some stocks, the sector's fundamentals remain solid, with an uptrend expected to continue into early 2026 [5][12]. Cement Sector - Recent weakness in cement stocks presents an entry opportunity. With increasing infrastructure and capital expenditure activity, cement demand is projected to rise sharply in the second half of the year. Investors are encouraged to accumulate quality names during this correction [6][12]. PSU Banks - The PSU banking sector has seen a strong rally, with attention on State Bank of India's upcoming results. If SBI indicates robust loan growth and improved margins, the sector will likely remain in focus. However, any earnings miss could lead to short-term volatility [7][12]. Midcap and Smallcap Stocks - Midcap and smallcap stocks, which have seen declines of 50-60% from their highs, are expected to participate more in the broader market as earnings visibility improves. The market is anticipated to remain stock-specific in the near term, with rotation between sectors [8][12]. Aviation Sector - The aviation sector, particularly InterGlobe Aviation (IndiGo), is viewed positively due to low crude prices and strong passenger demand. However, frequent promoter selling introduces volatility, making it a better trading opportunity [9][10][12]. Consumer Sector - Consumer companies are expected to benefit from festive demand, but attention should be paid to margins and input costs. While Titan and Bharti Airtel reported strong earnings, Tata Consumer's margins were slightly disappointing [11][12].