Explaining why this matters, Mehta contrasted the sell-off in these stocks with the wider market, saying, “The median fall from the 52-week high for 1,510 companies is roughly around 24% and a lot of these companies have corrected 30, 40, 50%.” In his view, this sharper correction has pushed several businesses into a zone where valuations are becoming attractive, provided the underlying fundamentals remain intact.
Mehta stressed that the investment case for railway and PSU companies has evolved beyond short-term pre-budget seasonality. “Gone are the days when there was only a railway budget type of trend in this type of business,” he said, adding that these companies are now being driven by core metrics such as revenues, earnings growth and healthy order books, rather than sentiment-led rallies.
On the broader market setup, Mehta stated that midcap and small-cap stocks have shown signs of recovery over the past week. He expressed cautious optimism that the market’s “complexion” could improve over the next three months, potentially supported by the return of foreign institutional investors (FIIs).
Also Read: ‘Base is reset’: Mihir Vora sees cleaner setup for markets in 2026
However, he concluded with a clear filter for investors looking at beaten-down railway and PSU stocks. Any renewed interest, he said, must be anchored in fundamentals, with earnings visibility and cash-flow generation remaining the most critical determinants of sustainable value.
For the entire interview, watch the accompanying video
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