“So far, 25 Nifty companies including Maruti have reported just 3.5% profit growth, even on a low base,” he noted. BFSI players delivered only 3% growth while IT firms — including midcaps — clocked a modest 4%
Talking to ET Now, Kant said: “We expect a 4–5% correction in November,” ,adding that weak guidance from cement makers and muted demand commentary across sectors are weighing on sentiment. He highlighted that only selective pockets—renewables, chemicals, tyres, refiners—showed strength, and even those lacked strong future outlooks.
“Stock-specific opportunities remain, but earnings need to firm up before markets resume their march toward new highs,” Kant concluded.
Sectors like renewables, cement, refiners, chemicals, and tyres showed better prints, but many lacked forward-looking confidence. “Cement companies are sceptical about growth ahead, which is capping market upside,” Kant added.
He sees continued profit booking in November before markets regroup based on commentary and demand checks. “Reliance stands out as an outlier and banks remain strong. But overall, I expect a near-term correction of 4–5%.”
Sector Outlook
- Bullish: PSU banks, private banks, defence, metals
- Improving asset quality & expanding credit growth in PSU banks
- Defence & metals seen as structural plays with strong global tailwinds
- Bearish: Automobiles
- Festive demand lower than hype; only 4–5% volume uptick expected
- High valuations in auto may trigger profit-taking post monthly sales data
“Public sector banks offer cheap valuations and better credit growth than private counterparts,” Kant said. Metals too remain
beneficiaries of global infrastructure spending.
However, he warned that auto stocks could see pressure after October sales, especially given a high base last year.
Key Takeaways
- Q2 earnings up only ~3.5% despite low base
- BFSI & IT drag; only select pockets beat estimates
- 4–5% near-term correction likely in November
- Top picks: PSU banks, metals, defence
- Avoid for now: autos due to weak volume trends & rich valuations