Defence stocks, consumer staples emerging as reliable plays for FY26: Religare's Dr Ravi Singh

Amid tensions with Pakistan, the momentum successful defence stocks is apt for the agelong term, says Dr Ravi Singh, SVP - Retail Research, Religare Broking.

"Even erstwhile we look astatine India’s defence fund it is increasing twelvemonth implicit year. In FY26, consumer staples and defence sectors are emerging arsenic reliable plays. Essentials connection stableness owed to dependable demand, portion defence and aerospace are gaining momentum amid rising military spending," helium says.

Edited excerpts from a chat:

In a satellite riddled with geopolitical tremors, however are savvy investors reshuffling their portfolios to enactment shockproof?
Some Investors are shifting toward safe-haven assets similar gold, U.S. Treasuries, and antiaircraft sectors specified arsenic healthcare and user staples. Geographic diversification, higher currency holdings, and vulnerability to existent assets similar commodities and existent property connection protection. By utilizing derivatives, investors tin support against downside hazard oregon payment from volatility. Additionally, maintaining higher levels of currency oregon liquid assets tin alteration speedy responses to rapidly changing planetary conditions.

With sectoral rotations becoming much than conscionable a tactical play, which industries are emerging arsenic the harmless harbours of FY26?

In FY26, user staples and defence sectors are emerging arsenic reliable plays. Essentials connection stableness owed to dependable demand, portion defence and aerospace are gaining momentum amid rising subject spending. These sectors supply a premix of resilience, pricing power, and mean maturation potential, making them beardown candidates for portfolio information during ongoing geopolitical uncertainty.

Do you deliberation that the affirmative momentum that we person seen successful defence stocks is present to enactment for a longer word amid rising tensions with Pakistan. What is the champion mode to play the defence theme?
In the existent planetary situation owed to escalating geopolitical tensions, nations are progressively prioritizing defence preparedness, starring to a notable surge successful subject expenditures worldwide. Especially amid tensions with Pakistan this momentum is apt for the agelong term. Even erstwhile we look astatine India’s defence fund it is increasing twelvemonth implicit year. In FY26, user staples and defence sectors are emerging arsenic reliable plays. Essentials connection stableness owed to dependable demand, portion defence and aerospace are gaining momentum amid rising subject spending. These sectors supply a premix of resilience, pricing power, and mean maturation potential, making them beardown candidates for portfolio information during ongoing geopolitical uncertainty.

What is your speechmaking of the Q4 numbers that you person seen truthful far? Which sectors basal retired and which ones person disappointed?

Q4 FY25 net showed beardown show from lodging finance, existent estate, insurance, and powerfulness sectors owed to request and borderline improvements. In contrast, IT and FMCG disappointed owed to anemic lawsuit sentiment and agrarian demand, though FMCG margins improved. FMCG players faced sluggish agrarian request and anemic measurement growth, though borderline enlargement offered immoderate respite. Overall, net item a wide sectoral divergence successful marketplace performance.

Smallcap stocks person bounced backmost successful the past 2 months. Do you deliberation this upside is present to stay?
The Smallcap scale deed an all-time precocious of 19,716 successful December 2024 but witnessed a crisp correction of implicit 25% successful the pursuing 2 months. However, since March 2025, the scale has shown a beardown recovery, reaching a precocious of 17,065 successful April. The smallcap betterment since March suggests improving sentiment, but aft a crisp rebound, a short-term pullback is possible. Existing investors whitethorn see partial nett booking, portion caller entrants should hold for a 5–7% dip earlier adding exposure. The outlook remains constructive, but a steadfast consolidation could travel caller gains.

FIIs person been buying Indian stocks non-stop amid the evolving geopolitical landscape. Do you deliberation sustained buying by FIIs is beardown capable to propulsion the marketplace higher oregon tin beryllium deed by nett booking from home investors?
Foreign Institutional Investors (FIIs) began accelerating their money outflows from the Indian marketplace astir October 2024, soon aft China announced a bid of economical stimulus measures, including cuts to the reserve request ratio (RRR) and argumentation involvement rates. FII buying has resumed owed to India’s unchangeable outlook and planetary shifts, including U.S.–China commercialized tensions. However, rising DII ownership offers stableness and whitethorn cushion volatility. While FII flows tin assistance markets, imaginable DII profit-taking and planetary uncertainty could bounds upside, starring to a much balanced and resilient market, with a higher stock of DII ownership, the Indian marketplace is apt to go much protected from planetary shocks, offering greater resilience against outer factors.

Where bash you See Nifty ending 2026 at? Will it beryllium different twelvemonth of coagulated affirmative returns?
Predicting the nonstop level of the Nifty scale by 2026 is challenging, arsenic it depends connected galore factors including home economical performance, planetary marketplace conditions, and geopolitical developments. Nifty whitethorn commercialized betwixt 22,000 and 26,000 by end-2026. While affirmative returns are possible, the travel is apt to beryllium volatile. Macroeconomic data, earnings, and planetary events volition usher direction. Investors should expect consolidation and short-term pullbacks on the way, and follow a cautious yet opportunity-focused approach.