An early onset of monsoon and the IMD has predicted that it is going to be above normal the rainfall this time around. Of course, one needs to see the spread, thereof, as it builds up, but do you think this would perhaps lead to a better rural recovery and a quicker one at that and could some of those themed sectors you think one can look at those for investments?
Siddhartha Khemka: Yes, this is the first time post 2009 that monsoon has arrived so early in India and the start has been pretty good spread across the country and with IMD predicting above normal rainfall, this should be supportive for the entire rural consumption theme to recover, that apart even the government on its part has pivoted in this budget from capex theme to a consumption theme. So as we progress into FY26, we believe that the consumption themes should do well and should also be aided by the rural recovery what some of the sectors like fertilisers, two wheelers, tractors, agri-related businesses, and some of the NBFCs are likely to see benefit from this phenomena.
But the earning season is just over now, just a couple of companies that are left with their earnings. Help us with your key takeaway from the earning season so far and how are you pencilling in the FY26 numbers.
Siddhartha Khemka: See, if you look at more or less the earning season has been quite decent with results either in line to better than expectations. On the Nifty front, we were expecting an EPS growth of around 4%. What we have got is roughly around 6%. The final numbers are yet to come in, but that is the broad take that we are seeing. So, the breadth of the earnings has also been pretty decent. So, what we expect is that mostly Q4 should be the bottoming out quarter where the worst of the earning season could be now behind. Q1, Q2 we will also see benefit of a low base of last year.
Q2 is somewhere where we see the earnings growth recovering sharply. For the entire year FY26, we are pencilling 12% to 14% earnings growth while FY25 should end somewhere about 5% to 6% earnings. So, overall, we are expecting earnings growth to recovery largely driven by domestic sectors be it your financials, be the consumption theme, some of the other niche small sectors I think that is something that should drive earnings this year.
Global sectors like IT, pharma, commodities that will remain volatile and prone to global news flows as well as developments and hence not that clear in terms of the near-term outlook.
