J.P. Morgan India FTM 6 Jul 26 India Equity Strategy; India Consumer Staples; India Hospitals; India Oil and Gas; India EMS and More

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J.P. Morgan India FTM 6 Jul 26 India Equity Strategy; India Consumer Staples; India Hospitals; India Oil and Gas; India EMS and More

Asia Pacific Equity Research

India First to Market 06 July 2026

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India Equity Strategy (Rajiv Batra/Rushit Mehta/Mixo Das/Arfi Khan)

Factor Investing – Jul’26: QMI recovery extends, Value underperformance sustains

In June, Value continued to underperform, reinforcing our preference to avoid Value in this phase of QMI (Mid cycle).

QMI has continued to recover following March’s downturn, consistent with mid-cycle dynamics, with the Macro

component improving in June. The interim peace deal has led to lower oil prices and laid the foundation for the normalization

of supply chains, which could provide a tailwind to growth. High-frequency indicators point to continued strength in economic

activity, suggesting that growth remained firm in 1QFY27. Non-food bank credit growth accelerated to 17.4% y/y in May, and

biweekly prints through June 15 suggest a similar pace, with broad-based traction across key sectors. Auto sales also remain

strong. GST collections rebounded to 14% y/y in June, driven by imports, although domestic collections also improved. In

addition, rupee stability and measures to attract foreign inflows have improved sentiment and liquidity. Even so, the QMI

remains well below typical mid-cycle levels. We are not yet inclined to characterize the environment as late-cycle - and continue

to expect a further QMI recovery over coming months - but inflation and El Niño remain key risks to monitor. In line with what

typically works in mid-cycle conditions, we remain biased to Quality + Momentum (with a preference for Earnings

Momentum).