Amthe said the brokerage has upgraded its market stance from “Neutral” to “Overweight” in early October after 18 months, citing improving macro indicators and policy support.
“We are looking at a base case upside of around 10%, taking the Nifty to 28,000 by December 2026, and in a bull case, the index could rise up to 19% from current levels,” he said in an interview with ET Now.
Liquidity, policy support fueling market sentiment
Amthe credited the RBI’s liquidity infusion and the government’s GST rationalisation and capex measures for reviving market momentum.
“The government and the RBI have provided enough ammunition to address recent macro weaknesses. This marks a turning point after months of consolidation,” he noted.
He added that the ongoing interest rate easing cycle, combined with domestic consumption recovery, could further cushion equity markets against global volatility.
Earnings season: Bottoming out phase, watch for management commentary
On the ongoing Q2 earnings season, Amthe said results have so far met subdued expectations, with flattish sales growth but a healthy rebound in profits (PAT).
“Only 10% of companies have announced results due to the delayed festive season, but the initial trend shows that margins are holding up better than expected,” he explained.He emphasized that management commentary will be crucial in gauging the outlook for the IT, consumption, and capital goods sectors.
“We are closely tracking how large-cap IT firms adapt to the AI-driven business model and how consumption companies assess post-festival demand,” Amthe added.
He expects the ongoing earnings downgrade cycle to bottom out in Q2 FY25, with stabilization and potential upgrades from Q4 FY25 onward.
Metals back in focus; InCred upgrades Tata Steel, JSPL, and SAIL
Amthe said InCred Capital has turned overweight on metals, led by improving domestic demand and stable pricing.“We have upgraded Tata Steel, JSPL, and SAIL to ‘Add’ ratings from earlier cautious stances,” he revealed.
He expects the steel cycle to remain resilient, driven by private capex recovery and limited downside from global protectionism.
“Profitability in the steel segment appears protected, while demand is likely to strengthen as domestic consumption rises,” he noted.
Amthe, however, maintained a cautious view on Jindal Steel due to its rich valuations, even as the broader metal index continues to outperform.
Broader outlook: Earnings stabilization to drive next leg of the rally
According to Amthe, markets have moved past the consolidation phase and are entering a more earnings-led rally phase.
He believes that from early 2025 onwards, corporate profits will start improving across cyclical sectors such as metals, banking, and industrials.
“Once earnings stabilize, markets will gain further strength, and investors should focus on sectors with visible margin recovery and operating leverage,” he said.