Talking to ET Now, Toshniwal noted that valuations are still near the 10-year rolling average, suggesting that despite record highs, markets are not expensive. “Earnings growth has picked up across the broader market, especially in mid and smallcaps. We expect lower double-digit earnings growth in FY27,” he said.
Stronger rebound next year
While FY26 may see high single-digit growth, Toshniwal expects a stronger rebound next year, driven by recovery in banking, pharma, and IT sectors. “Banking has stabilized with positive management commentary, pharma is reviving, and IT could surprise on the upside with large deal wins,” he added.
On the consumption front, he expects GST and interest rate cuts to benefit mid and premium consumption segments, while the capital goods sector — particularly those tied to data centres, power, and defence — should see robust growth in the second half of the fiscal.
“The market’s recent rally has strong structural support,” Toshniwal said, adding that retail credit growth, improving liquidity, and solid domestic demand will continue to power the market through FY27.