“Yes, actually there is a revival by buying shares at a lower level, but now we are very close to the budget and while expectations from this budget are very low, given the kind of FII outflows we are seeing, it is better to see what happens in the budget, whether there are some measures to control that kind of outflow and then make a call,” Dewan said.He added that valuations in the broader market have become more reasonable, creating opportunities for different segments.
“I think while there are opportunities in midcaps and also in smallcaps, valuations there have improved again, even though they were expensive a year ago. So there are opportunities in infrastructure and capital markets. The PSU banks have done well, so I still feel there are still opportunities to go. So there are opportunities in market cap, but in a few days we can again… let’s see what happens in the Budget and then a call commit,” he said.
Power and T&D remain central
Within the power sector, Dewan remains constructive, especially towards transmission and distribution (T&D) players, even as power generation companies have lagged behind.
“Yes, I like the energy sector as a whole. But if you see energy companies, they have underperformed over the last year. But T&D space is one where you are still seeing better results. GE Vernova’s results were also good last quarter and good results this quarter as well. I remain positive on this space,” he said.
He also sees new opportunities in power generation as stocks have corrected and valuations have become more attractive.
“But now you also have to look at the broader energy space, at power generation companies. I think there is an opportunity because the shares have consolidated, they have corrected and they are now available at a decent valuation. So energy is a space where you see some of the demand improving as well,” Dewan added.
Financial services and PSU banks still offer value
Financial services remains one of the better performing segments, with PSU banks excelling in terms of asset quality and valuations.
“Yes, the financial sector has done well, so that is one aspect. What stands out there is the PSU banks. That’s where I feel the kind of performance and the balance sheet they are sitting on and they are still improving the asset quality, recovery is still happening and they are not expensive in terms of valuations,” Dewan said.
He believes PSU banks still offer more upside potential, while select private sector banks also appear fairly valued after recent corrections.
“So I think this is an area where there are still more legs, there is still a valuation gap and even the private sector bank, barring a few names that didn’t do so well this quarter, but HDFC Bank was also decent. Kotak or Axis Bank are also doing them, valuation-wise they are not very expensive and they have corrected from their highs, so this is also a space you can look at,” he said.
However, regarding NBFCs, Dewan advised caution and stock-specific selection.
“NBFCs one again has to be very stock specific there. So there you have seen that Bajaj Finance has not been able to perform and that is one of the favorites of everyone’s portfolio. So you have to be very stock specific as far as NBFCs are concerned but there is still a lot of room left in PSUs and some private sector banks,” he added.
Realty: long-term accumulation, not momentum
The real estate sector has remained under pressure for most of 2025, and Dewan said the prospect of recovery in demand is still limited, even in key markets like NCR.
“The real estate space is under pressure. I am from Delhi, so the NCR market has also been under pressure. Before this quiet period that started last year, you were seeing a very rapid increase. You would expect interest rates to be low and some demand to increase, but so far you are not seeing that kind of demand increase,” he said.
He pointed to weak pre-sales numbers as a sign that momentum has not yet returned.
“So the pre-sales in the last quarter are very low. So you have to see some good launches and respond well to them and then make a call whether anything is picked up in the real estate sector or not,” Dewan said.
While he sees value for long-term investors, he doesn’t recommend real estate as a short-term momentum or trading strategy.
“I think at these levels you can start investing for a long term period of two to three years because they are good levels, they have corrected a lot. But for momentum play or just for trading, I won’t really recommend it from now on. Let the momentum come back and then you can move on,” he said.
Prefer micro market players over diversified names
Within the real estate sector, Dewan favors niche, micro-market-oriented developers over large, diversified players at current valuations.
“I think it is better to play the niche market. If you study the Mumbai market or the NCR market, if you see a revival in those markets, you should play those stocks because we have seen more correction there than what you have seen in the bigger players who are well diversified like Prestige,” he said.
He added that region-focused developers could offer better risk-return if local market conditions improve.
“So I prefer to play in the micro market because even in NCR there are stocks that operate only in NCR and there are some that are concentrated only in Mumbai Pune. So I prefer to play in those micro markets,” Dewan said.
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