India’s equity markets are currently in a consolidation phase, but the foundation for a fresh rally is quietly taking shape, according to Dikshit Mittal, Senior Fund Manager at LIC Mutual Fund. Speaking to ET Now and ETMarkets on October 9, 2025, Mittal emphasized that festive consumption, manufacturing momentum, and supportive policy measures could drive the next leg of growth, especially as Q3 earnings begin to reflect economic recovery.
“Markets have been consolidating for nearly 18 months because of muted earnings,” Mittal said. “But from the third quarter onward, we expect earnings growth to accelerate and the market to resume its upward journey.”
Earnings Momentum and Domestic Liquidity: Key Catalysts
Mittal pointed out that despite weak global cues, domestic liquidity remains robust, supported by a soft cost of capital and resilient retail participation. The second-quarter results will be crucial, but the real inflection point is expected in Q3, when consumption trends and earnings growth converge.
India’s Market Performance Snapshot (2024–2025)
| Metric | Value (Oct 2024) | Value (Oct 2025) | Change (%) |
|---|---|---|---|
| Nifty 50 Index | 18,950 | 19,280 | +1.7% |
| Sensex | 63,400 | 64,120 | +1.1% |
| Midcap Index | 32,500 | 35,800 | +10.1% |
| Retail SIP Inflows | ₹13,200 crore | ₹14,850 crore | +12.5% |
Festive Consumption: Discretionary Demand to Lead
LIC MF has turned bullish on discretionary consumption, citing rising real incomes, GST-led tax relief, and RBI’s liquidity support. Urban and rural wages are now outpacing inflation, which means consumers have more disposable income heading into the festive season.
Mittal expects strong demand in automobiles, jewellery, electronics, and premium goods. Stocks like Titan, which reported a robust quarterly update, reflect this trend.
Festive Consumption Outlook – Sectoral Impact
| Sector | Expected Growth (Q3 FY26) | Key Drivers |
|---|---|---|
| Automobiles | +12% | GST cuts, rural demand |
| Consumer Durables | +10% | Price drops, pent-up demand |
| Jewellery | +15% | Tax relief, festive buying |
| Apparel & Footwear | +8% | Urban wage growth |
Manufacturing and Semiconductors: Next Growth Engines
Mittal also highlighted India’s electronics manufacturing services (EMS) and semiconductor ecosystem as long-term growth drivers. Import substitution, PLI schemes, and export-linked incentives are helping build scale in sectors like mobile assembly, chip packaging, and EV components.
India’s Manufacturing Revival Indicators
| Metric | Value (Q2 FY26) | YoY Growth |
|---|---|---|
| IIP (Index of Industrial Production) | 142.6 | +6.4% |
| Manufacturing PMI | 56.2 | Expansion |
| EMS Exports | ₹18,500 crore | +22% |
| Semiconductor Investments | $3.8 billion | +35% |
Investor Strategy: Stay Invested in Quality
Mittal advised investors to remain patient and stay invested in quality stocks, especially those with strong earnings visibility and sectoral tailwinds. “This is a wait-and-watch phase, but the next rally will reward those who stayed the course,” he said.
LIC MF is overweight on auto, consumer discretionary, EMS, and select financials. Midcaps and smallcaps with earnings momentum are also expected to outperform.
Disclaimer: This news content is based on verified public statements, financial data, and expert commentary as of October 9, 2025. It is intended for editorial use and public awareness. The information does not constitute investment advice or stock recommendations and adheres to ethical journalism standards.
