Stocks vs Gold: Which asset could create more wealth in the Samvat 2083?

Indian equities are looking increasingly attractive compared with gold, with their relative valuations falling to levels rarely seen over the past three decades. According to Samco Securities, the current market environment presents an opportunity for investors to increase their exposure to equities in Samvat 2083, while retaining existing gold investments as a portfolio hedge.

In its Market Outlook for Samvat 2083, the brokerage highlighted that the Sensex-to-Gold ratio currently stands at 6.43, significantly below its long-term median of 9.8 since 1990. The ratio is also lower than approximately 86% of its monthly readings over the period.

The ratio had touched 5.26 in March 2026, its lowest level since 1991, reflecting the extent of Indian equities' underperformance against gold during the recent market cycle.


Historically, similar levels have marked attractive entry points for equity investors. The ratio previously entered comparable territory in 1993, 2001-03, 2009 and 2011-13. On each of these occasions, Indian equities subsequently outperformed gold by a significant margin over the following years.

“Relative to gold, Indian stocks are as cheap as they have been in a generation. Gold has done its job as a hedge, and we recommend holding on to existing gold investments but not adding to them aggressively at these levels,” said the brokerage in its report.

The brokerage further believes the current valuation gap provides an opportunity to increase equity exposure. "This is the time to tilt your portfolio towards equities," it recommended, while advising investors to retain their existing gold investments rather than aggressively adding to them at current levels.

Why Samco believes equities could outperform gold

The Sensex-to-Gold ratio provides a broader perspective on investor sentiment and relative asset performance. A rising ratio indicates that equities are outperforming gold and investors are increasingly willing to take risks. A declining ratio, on the other hand, suggests a preference for gold and safer assets.

Samco noted that the decline in the ratio during the previous Samvat was initially driven largely by the rally in gold rather than a collapse in equities. However, Samvat 2082 brought the equity correction that the brokerage had considered necessary for a more durable bottom.

During the period, the Sensex declined from its high of 85,762 to a low of 71,593, while gold continued to advance, pushing the ratio to its March 2026 trough of 5.26.

With the ratio now recovering to 6.43, Samco believes the relative valuation equation favours equities.

Cheap valuations, but global risks remain

Despite its constructive outlook on equities, Samco has cautioned that the risks confronting Indian markets have not disappeared.

Elevated crude oil prices, currency depreciation and global market volatility remain important considerations for investors entering Samvat 2083.

Brent crude remained above $100 for much of the year amid the US-Iran conflict. Given India's dependence on crude oil imports, sustained high prices could put pressure on the rupee, inflation, government finances and corporate profit margins.

Currency weakness is another concern. The rupee depreciated from 87.88 to 95.15 against the US dollar during the Samvat, a decline of approximately 8%, and touched record lows near 97. Persistent foreign investor outflows and a wide trade deficit continue to weigh on the domestic currency.

Global market leadership has also shifted, with US healthcare, energy and financial stocks gaining prominence over technology and semiconductor stocks. Volatility across asset classes remains elevated.

"Cheap valuations tell us what to own; uncertainty tells us how to own it," Samco said, outlining diversification as its preferred strategy for the year ahead.

Samco's stock picks for Samvat 2083

Against this backdrop, Samco has identified a diversified basket of Indian stocks across sectors and investment horizons, combining long-term growth opportunities with shorter-term tactical ideas.

Among the one-year recommendations, Adani Power represents the power-generation theme, while BSE offers exposure to the growing capital-market infrastructure segment. Tech Mahindra is positioned as a potential turnaround and rupee beneficiary.

Azad Engineering and HFCL feature as high-growth opportunities linked to aerospace, defence, energy components, telecom and data-centre connectivity. Tips Music, meanwhile, represents an asset-light business model in the media and entertainment space.

For the six-month investment horizon, Samco has selected L&T Technology Services, citing the potential for an earnings recovery and benefits from rupee depreciation, alongside TVS Motor Company as a consumption-oriented opportunity.

The shorter-term basket includes MCX, which could benefit from increased market volatility, and Sansera Engineering, which features as a momentum-oriented play in the auto and aerospace components space.

Why US ETFs find a place in Samco's portfolio

A notable feature of Samco's strategy for Samvat 2083 is its recommendation to diversify beyond Indian equities through dollar-denominated US-listed exchange-traded funds (ETFs).

The brokerage has identified two ETFs: the Energy Select Sector SPDR Fund (XLE) and the Health Care Select Sector SPDR Fund (XLV).

The XLE ETF provides exposure to the US energy sector and is positioned as a potential hedge against rising crude oil prices. This is particularly relevant for Indian investors because higher oil prices can hurt domestic equities through their impact on import costs, inflation and the rupee.

The XLV ETF, which tracks the US healthcare sector, is recommended as a defensive, dollar-denominated holding that could help cushion portfolios against further weakness in the Indian currency.

Indian investors should consider geographical diversification

Samco's overseas allocation strategy is built around three considerations: currency diversification, access to global businesses and the potential benefits of lower correlation between markets.

For Indian investors with future expenses linked to foreign currencies, including overseas education and travel, holding dollar-denominated assets can help protect purchasing power when the rupee depreciates.

US markets also provide access to global leaders in sectors such as technology, healthcare and energy, where comparable investment opportunities may not always be available in the domestic market.

The brokerage also pointed out that Indian and US equities do not necessarily move in tandem. During Samvat 2082, the S&P 500 gained while the Nifty declined, illustrating the diversification benefits of holding assets across markets.

Resident Indian individuals can invest overseas under the Reserve Bank of India's Liberalised Remittance Scheme (LRS). However, returns from US investments depend on both the underlying security's performance in dollar terms and movements in the USD/INR exchange rate.

Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here