Sandeep Tandon Predicts Market Recovery Amid Midcap Euphoria
Sandeep Tandon emphasizes that Indian markets are on the mend, signaling an end to a challenging phase.
Indian equity markets are showing signs of recovery after two tough years.
Tandon highlights the importance of relative valuation over absolute metrics.
Concerns are shifting from smallcaps to crowded midcaps, indicating market dynamics.
Sandeep Tandon, the Founder and Chief Investment Officer of quant Mutual Fund, expressed optimism about the Indian equity markets during the NDTV Profit Ignite 2026 event, stating that the worst phase is now behind us. He noted that after a challenging two-year period, the markets are beginning to stabilize and show signs of bottoming out. Tandon emphasized that macroeconomic fundamentals are improving, with rising domestic liquidity and foreign institutional investor (FII) selling nearing its end.
Tandon provided context on the market's recovery, explaining that the last two years have been particularly difficult for investors. He pointed out that a significant capitulation occurred about six months ago, which has paved the way for a more favorable market environment. The Nifty and other indices are reportedly forming a durable bottom, suggesting a potential for future growth. Tandon advised investors to focus on relative valuation metrics rather than solely on absolute index levels.
In his analysis, Tandon addressed the ongoing criticism of domestic institutional flows, arguing that mutual funds have played a crucial role in stabilizing the market amid foreign outflows. He highlighted that the narrative blaming local fund houses for providing exits to foreign investors is misleading, as domestic capital has been vital for market absorption. Furthermore, he identified midcaps as a segment of concern, noting that extreme euphoria has developed within the Midcap 150 companies, which could pose risks for investors.
Tandon also discussed sector rotations, indicating that while some areas are crowded, there are opportunities in neglected sectors such as fast-moving consumer goods (FMCG). He believes that these sectors, despite being overlooked, have strong fundamentals that could provide favorable risk-reward scenarios. Additionally, quant Mutual Fund has increased its allocation to precious metals like gold and silver as a hedge against macroeconomic fluctuations.
Looking ahead, Tandon remains optimistic about the market's trajectory, suggesting that disciplined investment strategies in undervalued sectors will likely outperform those focused on crowded momentum plays. With improving macroeconomic indicators and waning selling pressure, he encourages investors to adopt a strategic approach as the new market cycle unfolds.
