“Definitely, it looks like, seeing the advances growth number of all the financials and banks which they have reported, both public sector and private sector does reflect that there has been some uptick in the economy, otherwise public sector banks would not have reported 15% or 13% kind of an advances growth so that was an outlier to that extent,” Kant observed.
He highlighted that even HDFC Bank’s 9.9% growth in advances is a “proxy of economic momentum picking up.” As a result, he expects the overall quarter to be “slightly better though in single digit only,” projecting that Nifty 50 companies could post earnings per share (EPS) growth of around 7.5–8%, compared to earlier expectations of 4–5%. “This is I am talking about the performer earnings growth and not extraordinaries and one-offs,” he clarified.
Kant believes that automobiles, metals, and banking will drive this growth momentum. “Automobiles can give you a slight outlier kind of a performance followed metals basket, that is looking pretty attractive. The demand has been good on the Indian domestic metal consumption,” he said. However, he cautioned that “the disappointment will come from the consumption sector,” adding that “all FMCG plays, like Dabur, HUL and the likes are likely to disappoint again.”
While he expects the broader market to remain rangebound in the near term, he sees potential for pickup once the earnings season is fully underway.
On the consumption outlook, Kant remains guarded. “What I was talking about was the staple basket as of now and that will disappoint and we do not think that Q3 would be better than Q2 or remarkably better,” he said. Although he anticipates some improvement in volume growth—from 3% to around 5–6%—he does not expect it to trigger a sector re-rating. When asked about discretionary consumption and retail, especially after Titan’s strong update, Kant urged caution. “Titan you have to read with a pinch of salt, there is a caveat out there,” he remarked. He noted that the growth in Titan’s studded jewellery segment was in the mid-teens, while plain gold jewellery was lower. “All the growth numbers came through selling of coins, so where the margins may not be there,” he pointed out. According to Kant, this could lead to margin pressure when Titan reports its Q2 earnings. “Whatever rally has happened in Titan, maybe couple of percentage point more, but then the stock is not likely to see a trending bias going forward into Q4,” he warned.
He added that “local jewellers like P N Gadgil and all are likely to do better again going forward because they have a franchisee model as well which has been working well for them and Kalyan Jewellers also has been doing well.”
On the consumer durables and auto sectors, Kant expects a peak in performance this quarter. “Automobiles will top out this time around, the numbers, because the base effect of October was very high last time both Navratri and Diwali fell into the same season,” he said. While a 10–12% growth in October is likely, he expects it to “plateau out from there on because forward bookings are not there.”
Concluding his outlook, Kant advised a cautious approach: “There is a time for medium to short-term perspective one should be booking out and then wait for November and December to pan out to take a structural tailwind kind of a play but for that there is a wait time for that, a better entry can be there.”
With mixed cues from sectors and modest expectations, the upcoming earnings season could set the tone for the next leg of market movement, balancing optimism with realism.
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