On the earnings front, Amnish Agrawal notes that the September quarter saw initial signs of improvement after several muted quarters. The recovery in earnings is gradual, with only modest expansion in the Nifty’s earnings base so far, making the outlook for the December quarter somewhat mixed. However, he maintains that the trends are clearly better than the previous year. More clarity is expected as more companies report results in the coming days, and there is no immediate reason to believe the growth momentum seen in the previous quarter will fade. At the same time, it advised investors to be cautious, as the earlier earnings recovery was largely led by commodity-oriented sectors such as steel, cement and oil and gas, whose performance will be key in the current quarter.
Turning to sectoral trends, Amnish Agarwal points out that the information technology space, which has been underperforming for long, is starting to show signs of renewed interest. With IT stocks delivering muted returns annually, the recent price action could lead to a short-term catch-up rally driven by valuation comfort and portfolio rebalancing. However, he stresses that the absence of strong earnings triggers continues to be a challenge. While upside is possible in the near term, a sustained revival will depend on medium-term improved visibility and demand conditions.
Amnish Agarwal remains bullish on defense stocks from a medium to long-term perspective, despite the recent correction in the sector. It highlights that defense names have corrected by around 10-15% in the last few months, even as the order book remains strong. With procurement trends expected to improve over the current year, growth rates for many leading companies could accelerate from the current high single-digit to mid-teen levels. According to him, any meaningful decline in frontline defense stocks should be seen as an opportunity to accumulate quality names.
On Ola Electric, Amnish Agarwal struck a note of caution, pointing out that the company has not benefited from the broader strength seen in the auto sector. While auto volumes have improved following GST rationalization, Ola’s sales have remained significantly below peak levels with limited momentum. It also flags intense competition from established players such as TVS and Bajaj, which are leveraging strong cash flows from their ICE businesses to capture a stake in electric vehicles. Apart from its battery business, Ola currently lacks a clear differentiating edge, which makes consistent performance challenging in the absence of a visible pickup in volume.
Overall, Amnish Aggarwal believes that as the year winds down, investors are increasingly moving beyond short-term index movements and focusing on earnings sustainability and sector-specific opportunities. With corporate fundamentals gradually improving and select pockets of strength, market participants are more inclined to position for the coming year rather than chasing incremental gains in the current year’s final phase.
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