Speaking to ET Now, Balasubramanian said the market’s positive momentum reflects growing confidence that corporate earnings will strengthen in the coming quarters, supported by policy measures already in place. “The trend at the start of the year is clearly positive. Expectations of better earnings post last year’s GST cuts and the subsequent RBI rate cuts are now getting reflected in market behaviour,” he said.
He noted that recent gains are not purely momentum-led but are rooted in value-based buying across the broader market. “What we are seeing is value-driven participation, either through attractive earnings yields or stocks where prices have corrected but the underlying assets and businesses remain very strong,” Balasubramanian explained. Asset-backed companies, in particular, have seen renewed investor interest, contributing to the recent upswing.
Focus on companies demonstrating sustained profit growth
According to him, this combination of improving earnings visibility and selective value buying is consistent with where the market was expected to head. “Earnings improvement in the current year should take the market to a different level. The Nifty touching a new high is broadly in line with that expectation,” he said.
With Q3 earnings around the corner, Balasubramanian believes the focus will remain on companies that can demonstrate sustained profit growth, as investors look beyond short-term rallies and reward fundamentally strong businesses in a gradually improving macro environment.
