Earnings outlook turning positive, says Quantum AMC
Indian markets may be range-bound in the near term, but the medium- to long-term outlook remains bullish, says Christy Mathai, Fund Manager at Quantum AMC.
“We are clearly seeing upside in our portfolio companies compared to six months ago. Economic tailwinds are becoming more visible — GST rationalization, consumption-driven tax cuts, and monetary easing are all contributing to a positive outlook,” Mathai told ET Now.
While the last two quarters saw earnings downgrades, she expects improvement ahead, supported by recovering demand and easing inflationary pressures.
Banking sector recovery offers opportunity
Mathai highlighted that banking stocks, which struggled with margin compression and muted credit growth, are now showing signs of recovery.
“We’re seeing reversal in trends — margins are stabilizing, and credit growth is improving. So, the largecap, liquid market plays in banking remain an attractive bet,” she said.According to Mathai, strong balance sheets and improving loan growth make banks a “core holding” in Quantum AMC’s portfolios.
New bets: Logistics, pharma, and insurance gaining traction
Beyond traditional sectors like banking and IT, Quantum AMC has been adding exposure to niche opportunities.
“In logistics, the expected commissioning of the Dedicated Freight Corridor could drive a structural uptick in freight volumes,” Mathai explained.
In pharma, the fund is focusing on companies with strong pipelines and reasonable valuations. “We are finding interesting plays where the incremental growth pipeline is improving,” she noted.
Insurance is another sector seeing a re-rating. “General insurers had faced high claim ratios and opex spikes, but things are stabilizing now. Valuations are attractive again,” Mathai said.
Macro tailwinds: Consumption revival and policy support
With tax cuts boosting consumer spending and monetary easing improving liquidity, Mathai expects a gradual pickup in discretionary consumption.
“Macro conditions look healthier. The combination of fiscal support, lower rates, and stabilizing inflation creates a strong base for earnings to recover,” she said.
She added that investors should focus on quality largecaps with sustainable earnings visibility rather than chasing short-term momentum.