Indian market at 11% discount to long-term average; Anshul Saigal says it's a buyer's market for 3–5 year investors

With nine out of ten investors reportedly confused about the market's direction, Anshul Saigal, Founder of Saigal Capital, sees a rare opportunity, and not a warning sign. Speaking to ET Now, he argued that the current wave of bearishness is itself a contrarian signal, and that patient long-term buyers stand to gain significantly from today's valuations.

"If you are a buyer for the next three to five years, this is a very interesting market — a market where a lot of money rests on the table for those who are patient," says Saigal.

Valuations at a meaningful discount

The Nifty currently trades at approximately 18.5 times 12-month forward earnings, an 11% discount to its 10-year long-term average of 21 times. Meanwhile, small and midcap stocks have fallen 30% to 50% from their all-time highs over the past 18 months, suggesting both time and price correction have already played out.

Earnings slowdown is temporary, Saigal argues

After a strong 16% earnings CAGR for the Nifty between 2020 and 2025, growth decelerated sharply to around 5–6% in FY26. Saigal sees this as a cyclical trough, not a structural break. He expects earnings to reaccelerate in the second half of FY27 and into FY28, supported by a favourable base effect and a pickup in private sector capital expenditure.

India's structural story remains intact

To illustrate India's long-term trajectory, Saigal pointed to mobile phone exports, which rose from roughly ₹1,500 crore in 2015 to over ₹2 lakh crore in 2025, a 130-fold increase, while imports collapsed by 92% over the same period. He sees similar patterns playing out across PSU banks, sugar, capital goods, electronics, and manufacturing.

Where to invest: themes over sectors

Saigal favours a stock-specific approach over broad sector bets. He highlighted the AI data centre and energy transition themes, spanning solar, wind, and oil and gas capex, as near-term opportunities. Within IT, he suggested looking at niche companies exposed to semiconductors and AI infrastructure rather than traditional software services, where uncertainty around AI disruption has not yet settled.

On financials, he expressed confidence in PSU banks as key beneficiaries of a private capex revival, and called out housing finance and diversified NBFCs as attractively valued. He noted Indian financials are well-capitalised with manageable credit costs, unlike many global peers.