Spark CIO Devang Mehta: Metals look stretched, but consumption and capex still offer value

With metals prices running up sharply over the past year, investors should be cautious about chasing the rally at current levels, even as geopolitical tensions and industrial demand continue to support the broader theme, according to Devang Mehta, Deputy Managing Director & CIO–Equity at Spark Private Wealth Management.Mehta said the risk-reward in metals has turned unfavourable for fresh investors, even though prices may not have peaked yet. The rally, he said, “could probably have some more steam left,” but added that “the risk reward would not be that favourable” for those entering now. Existing investors, however, can continue to stay invested “for a few, a couple of months more.”

Geopolitics remains a key driver for precious metals, particularly gold, which continues to act as a hedge during periods of uncertainty. Mehta stated that “global geopolitics is dominating once again,” while also pointing to silver’s role as “an industrial metal,” supported by demand across sectors. He added that ferrous and non-ferrous metals are seeing demand “not only in India, but also across the globe.”

On financials, Mehta said the banking, financial services and insurance (BFSI) space remains attractive after underperforming over the past few years, but investors looking for faster compounding should broaden their focus beyond banks. He said capital market-linked financials could deliver stronger growth over the medium term, stating that banks may see “10–12, 14% type of credit growth,” while other financial segments can grow at “18–20, 22%” over a three-to-five-year horizon.

Also Read | Keystone Realtors expects to beat FY26 sales guidance on strong mid-income, affordable demandConsumption has also moved back into focus, supported by policy measures and improving demand trends. Mehta said “a lot of consumption now… has come back to the fore,” with strength visible across discretionary as well as lower-income segments, which he said have “come back with a bang.” He highlighted opportunities across discretionary consumption, hotels and travel, adding that “India now sells more SUVs (sports utility vehicles) than the entry-level cars.”

Alongside consumption, Mehta remains positive on the capital expenditure theme. He said engineering, capital goods, power and infrastructure-linked companies continue to offer opportunities, adding that consumption, capex and financialisation together form “three themes” that remain attractive for portfolio construction.

Also Read | Amagi IPO: CEO says move to profit is structural, not a listing clean-up

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here