Further market instability? Vipul Bhover of Waterfield to buy sectors, evaluation and what to buy

In a year, global trade stress, delay in cut rate cuts, and marked by domestic uncertainties, investors are looking for clarity and determination. To decode the mood of the current market and the road ahead, ET Market Said with Vipul bhoverSenior Director among Waterfield Advisors and head of equities.

From HNI and family offices shifting portfolio strategies to Outlook on mid and smallcaps, Bhover provides deep insight on how to earn capital allocation to sector rotation and alternative investments in 2025.


Part:

Equity Market Outlook: Volatility or Opportunity?

Q. A lot is happening in the markets – geo -political stress, business tariff concerns and domestic trigger. Is the recent reform a sign of deep instability?

Vipul Bhover: Equity markets follow earnings. Recently volatility stems from the recession of earning. But in our investable universe of ~ 5,000 companies, we still see an increase in income of double digits. Hence the markets were recovered in March -May. RBI’s interest rate cuts also helped, which reduced the cost of capital while improving earnings.

However, new 25% can introduce tariffs (above 10%) sector-specific instability. But the markets rarely fall twice for the same reason. If the earnings continue to grow yoy, which is suggested by current trends, then the market should be caught. Volatility will probably be limited to some areas.

Portfolio Shifts: How are HNIS and family offices allocated

Q. How are rich investors transferring exposure to property classes?

Vipul Bhover: Three years ago, the portfolio was usually divided between equity and fixed income 50:50, with equity towards the large cap. Today, we are looking at a 70:30 partitions, bent towards equity and semi-equity products such as REITs and invitations. Non-equity bucket is the place where most of the changes are happening. Investors are rapidly allocated capital for equity or near-equity devices, and this trend continues.

Midcaps, Smallcaps and Sector Rotation: What’s overheat?

Q. Are midcap overheat? Where is the smart money taking?

Vipul: On the average evaluation average, yes, midcaps look expensive. But the balance sheet is the cleanest cleaned that we have seen in 25+ years, especially in the context of average debt-to-equity. Most Capex is happening in middle and small areas such as energy and real estate – not large caps.
Therefore, while midcap may look expensive at first glance, the underlying growth and capex justify the current assessment. He said, a broad-based rally is held in the middle and smallcap. Go ahead, expect stock and sector-specific moves.

FII, Fed Cut and Global Signs

Q. FII has withdrawn Rs 27,000 crore in just 10 days. Why migration?

Vipul: While FIIs are selling in the secondary market, they are active in the primary market, especially IPOs. They are exiting the shares of the old economy growing in the nominal GDP and re -published in areas showing high growth.

For Fed, recently American job data indicates an economic recession. Earlier, September was 41%chance to cut the rate of September. It has now increased by 80-90%. If the rate is cut, FIIs will return to emerging markets like India.

Rise of alternative investments: AIF, private credit and more

Neha: How are Indian investors responding to alternative investment products?

Vipul: There has been a lot of change in investor behavior. We have created a “development pool”, ~ 10% portfolio, including private equity, enterprise loan and private credit. Customers are ready to lock in capital for 10 years in exchange for high returns.

This 10% is now under discussion; Many want to increase it to 15%. We are also allocating pre-IPO, unrestaded opportunities and high-hearted strategies. With certain income being less attractive, interest is increasing in these strategies.

How to invest in the remaining part of 2025

Q. We are in the second half of 2025. What is your advice for new investors? What should they expect?

Vipul: Entry assessment is high, the market cap for GDP is 130% vs. 20-year average 90%. Do not expect 25% CAGR in the last five years.

We suggest to deploy capital in installments in 6 months. For FY26, the Nifty EPS is expected to be Rs 1,200 – a fair price of ~ 24,000 on 20X PE. For FY27, the Nifty can be ~ 26,000, considering 1,300 EPS. Markets are trading in this expected border.

Maintain a mixture of large, middle and smallcap depending on your risk profile. Allocate more for larges and balance the rest accordingly.

Sector to see: Theme within subjects

Q. Which sectors look promising?


Vipul:
We are seeing strength in “areas within areas”. For example:

  • financial: Borrowing is consolidating, but non-comprehensive plays, insurance, capital markets, are well performed.
  • Take: Traditional it is slow, but digital technology (eg swiggy, eternal) is increasing.
  • Health care: There are uncertainty in pharma, but the hospitals are good.
  • Real Estate Assistant: Real estate stocks have rally, now we prefer assistants, electrical goods, branded electronics and defense.

These pockets are continuously showing an increase in double digits and qualification capital allocation.

Q. Is it a “purchase-the-Deep” market? Any precautions for investors?

Vipul: Yes, buy dip works but take a long -term view. Do not chase Yoy Return. After a major rally, markets are integrated, which is healthy. Keep deploying capital, participate in instability, and avoid reacting emotionally to short -term swings.

(Disclaimer: recommendations, suggestions, ideas and opinions given by experts are their own. They do not represent the ideas of economic time)

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