Summary of "BEST Stocks in 2026 : Portfolio Strategy for Indian Investors | Sandeep Jain | FWS 83"

Summary of Finance-Specific Content from Video

Title: BEST Stocks in 2026 : Portfolio Strategy for Indian Investors | Sandeep Jain | FWS 83 Presenter: Sandeep Jain (Co-founder of a brokerage company in Jaipur) Host: Sharon

Key Market & Investing Insights

Asset Allocation & Investment Strategy (2026 Focus)

For 2026, Sandeep Jain recommends 100% equity allocation for young investors (age 20-40) with a long-term horizon.
Advocates an “active passive investor” approach: primarily passive investments (mutual funds, ETFs) combined with some active stock picking or PMS (Portfolio Management Services).
Suggested equity exposure rule of thumb: 100 minus your age = % in equities.
For investors with larger capital (>₹50 lakhs), PMS and AIFs (Alternative Investment Funds) are recommended for customized, active management.
Emphasizes having a financial advisor or mentor to stay motivated and disciplined, especially in volatile markets.

Equity Market Segments

Midcaps are the “sweet spot” for young investors, offering a good balance of growth and risk.
Historical returns over last 10 years:
- Midcaps: ~7x returns
- Large caps (Nifty 50): ~4.5x to 6x returns
- Small caps: ~4.75x to 5x returns
Microcaps are also recommended but fewer mutual funds exist for this segment. NSE has a microcap 250 index.

PMS vs Mutual Funds

PMS can outperform mutual funds but have:
- Higher expense ratios (~2.5%) vs mutual funds (~0.5%)
- Less tax efficiency (capital gains taxed annually at 20% in PMS due to frequent trading)
To beat mutual funds net of fees and taxes, PMS needs to generate ~3-4% alpha over benchmarks.
Sandeep’s PMS launched 14 months ago, delivering ~28% absolute returns since inception, and 16.2% annualized CAGR despite a flat market.
PMS portfolios are typically concentrated (20-25 stocks), with 3-4% max allocation per stock and ~10% max per sector for diversification.

Sectoral Investment Themes (Long-Term Buy & Hold)

Sandeep introduced a thematic framework called “HOO” for sector picks:

Hotels (Tourism)
- Bullish on domestic and religious tourism growth.
- Stocks mentioned: EIH Hotels (Oberoi group), ITC Hotels, Taj Hotels, GVK Hyderabad, Lemonry (luxury hotel chain).
Hospitals & Healthcare
- Medical tourism in India is booming due to cost advantages (~20% cost vs US).
- Key KPI: Average Revenue Per Occupied Bed (ARPO or RPOP) is rising, indicating better profitability.
- Stocks mentioned: Apollo Hospitals, Indraas Medical (promoter Apollo), Yatarth Hospital.
- Healthcare sector benefited from GST exemption on health insurance, boosting insurance penetration and hospital utilization.
House Improvement / Home Improvement
- Includes building materials, laminates, paints, ceramics, interiors.
- Stocks mentioned: Kajaria Ceramics, Stylm Industries (laminates), Century Plywood, Asian Paints (buy on dips due to competitive disruptions).
- Cement sector also bullish due to consolidation (e.g., Adani’s acquisition of ACC, Ambuja).

These sectors are seen as long-term “invest and forget” stories due to structural growth drivers.

Other Important Sectors

Banking & Finance:
- Private banks (ICICI, HDFC, Axis) are market darlings due to superior services and innovation.
- PSU banks are improving with consolidation plans to reduce number of banks to 4-5 large entities.
- NBFCs like L&T Finance, M&M Finance, Chola Mandalam, Manapuram Finance, IFL Finance are also promising.
Capital Markets Ecosystem:
- Bullish on exchanges and related companies after Groww IPO (~$12 billion valuation).
- MCX (commodity exchange) seen as a near-monopoly with strong moat.
Water & Wastewater Management:
- India has 16-17% of world population but only 4-5% of water resources.
- Companies like Ion Exchange, VA Tech Wabag, Enviro Infrastructure are recommended for long-term growth.
IT Sector:
- AI boom causing short-term volatility but Indian IT companies like Infosys, TCS, HCL Tech are resilient.
- Midcap IT stocks like Datamatics and IT hardware companies involved in data centers (Techno Electric, Anant Raj) are interesting but valuations for data centers are high.
Automobiles & Auto Ancillaries:
- Strong competition with new entrants and EV transition.
- Maruti Suzuki and Hyundai benefit from GST cuts on sub-1000cc cars, making them affordable in tier 2/3 cities.
- Auto ancillary companies recommended: Ask Auto, Lumax Auto Tech, Endurance Technologies, Subros (auto AC systems).
Telecom:
- Bullish on Reliance Jio Platforms IPO (expected ~₹55,000 crore), given its dominant position in telecom and digital services.

Real Estate vs Stock Market

Sandeep views flats as depreciating assets due to aging and obsolescence, whereas land appreciates slowly (~6% p.a. in Jaipur example).
Recommends investing in commercial real estate or REITs over residential flats.
Strong preference for stock market investments via SIP in mutual funds or ETFs for wealth creation.
For home buying, advises ensuring salary and net worth justify the EMI burden (example: ₹2.5-3 crore flat in Mumbai requires ₹4-5 lakh/month salary to comfortably service EMI).
Cautions against spending >50% of salary on EMIs.

Risk Management & Financial Planning

First step: Buy term insurance, health insurance, and accidental insurance for risk mitigation.
Then start SIP investments for wealth creation.
Emphasizes discipline, focus on work/career, and not trading recklessly.
Suggests direct equity investing only after accumulating at least ₹25 lakhs capital.

Performance Metrics & Valuation Notes

Hospital KPI: Average Revenue Per Occupied Bed (ARPO) important for profitability.
PMS annualized returns around 16.2% over 14 months despite flat markets.
Midcaps historically outperform large caps and small caps over last decade.
Data center business is capital intensive with lower returns; valuations currently high.

Disclaimers

Stocks mentioned may be part of their PMS portfolios.
Not formal financial advice; investors should consult advisors.
Tax inefficiency and higher fees of PMS vs mutual funds highlighted.
IPO investments carry risk; readiness and demat accounts important.

Methodology / Framework Shared

Active Passive Investor Approach

Use passive investments (mutual funds, ETFs) as core.
Supplement with active stock picking or PMS for alpha.
Maintain discipline with financial advisor support.

Portfolio Construction for ₹1 Crore PMS

20-25 stocks, max 3-4% allocation per stock.
Sector allocation capped at ~10%.
Diversification across 10-12 sectors.
Regular sector rotation based on macro themes and government policies.

Sector Selection Based on Macroeconomic Themes

Identify sectors benefiting from government policy (e.g., GST cuts, medical tourism push).
Focus on sectors with structural growth drivers: tourism, healthcare, home improvement, banking, capital markets, water management.

Risk Management Steps

Term insurance
Health insurance
Accidental insurance
Home insurance (optional)
Start SIP investments

Key Numbers & Timelines

PMS inception returns: ~28% absolute, 16.2% annualized CAGR over 14 months (started May 2022).
Midcap returns over 10 years: ~7x
Large cap (Nifty 50) returns over 10 years: ~4.5x to 6x
IPO: Groww valued at ~$12 billion, grew 70% in first week of listing.
Expected Reliance Jio Platforms IPO size: ₹55,000 crore, likely by March next year.
Real estate example: Land appreciating ~6% p.a. in Jaipur; Mumbai flat price ~₹2.5-3 crore for 1 BHK in affordable areas.
GST cut on health insurance and impact on hospital business growth.
Salary needed for ₹2.5-3 crore home: ₹4-5 lakh/month for manageable EMI.
Tax-free income slab raised to ₹12 lakhs, boosting consumption and loan eligibility.

Explicit Recommendations & Cautions

Recommendations

100% equity allocation for young investors in 2026.
Invest in midcaps, small caps, microcaps, and flexi cap funds.
Long-term buy & hold in “HOO” sectors: Hotels, Hospitals, House Improvement.
Private sector banks, NBFCs, capital markets ecosystem, water management, IT (selective), auto ancillaries, telecom (Reliance Jio).
Use SIPs in mutual funds or ETFs as no-brainer investments.
Diversify PMS portfolios with 20-25 stocks, sector limits.
Buy term and health insurance before investing.
Buy home only when financially ready; prefer commercial real estate or REITs over residential flats.

Cautions

PMS fees and tax inefficiency require higher alpha to justify.
Trading success rate in futures & options is very low (~150 out of 35,000 clients).
Real estate flats tend to depreciate; land appreciation is slow.
Data center valuations are currently high; wait for better entry points.
Avoid spending >50% of income on EMIs.
IPO investments require readiness and caution.

Disclosures

Stocks mentioned (Indraas Medical, Apollo Hospitals, Lemonry, Kajaria, Stylm Industries, Asian Paints, Ion Exchange, VA Tech Wabag, Ask Auto, Lumax Auto Tech, Endurance Technologies, Subros, Groww, MCX) may be part of the presenter’s PMS or recommended portfolios.
Commentary includes personal opinions and experience; not formal financial advice.
Taxation and expense structures of PMS vs mutual funds discussed openly.

Presenters / Sources

Sandeep Jain – Co-founder of a leading brokerage in Jaipur, portfolio manager, and educator.
Host: Sharon (YouTube channel: The OnePerson Club Show).

This summary captures the core finance-related insights, investment strategies, sectoral themes, portfolio construction principles, and macroeconomic context shared in the video.