Professional view: Rahul Ghose, the founder and CEO of Octanom Tech and Hedged In, believes tariff readability and wholesome Q1 earnings are key to a sustained rally within the Indian inventory market. In an interview with Mint, Ghose shared his views on a possible India-US commerce deal and its influence on the Indian inventory market and completely different sectors and his prime inventory picks. Listed below are edited excerpts of the interview:
What may help bulls regain energy?
The Indian fairness market has been subdued lately, largely because of tariff uncertainties and international commerce tensions.
The sell-off has been broad-based, with sectors like IT, auto, and metals underperforming, and main indices such because the Nifty 50 and the Sensex closing decrease for a number of classes.
For bulls to regain energy, the next catalysts can be essential:
(I) Readability on tariffs: A decision or constructive progress on tariff negotiations, particularly with the US, may eradicate a serious overhang and restore investor confidence.
(ii) Sturdy home flows: Continued inflows from the home institutional buyers (DIIs) have offered some assist, and a pickup in retail participation may additional stabilise markets.
(iii) Sturdy company earnings: Optimistic surprises within the ongoing Q1 earnings season, particularly from large-cap names, may set off a reversal in sentiment.
(iv) World stability: Easing of world uncertainties, together with US financial coverage readability and a discount in geopolitical tensions, would additionally assist threat urge for food return.
Will an India-US commerce deal give a contemporary increase to market sentiment, or is it pretty discounted?
The anticipation round an India-US commerce deal has been excessive, with markets intently monitoring negotiations forward of current tariff deadlines.
Whereas some optimism has already been priced in, a concrete, beneficial deal—particularly one which reduces or eliminates tariffs on key Indian exports—may present a significant increase to market sentiment.
Nonetheless, a lot relies on the scope and depth of the settlement:
(I) If the deal is complete and covers delicate sectors, it may set off a robust rally.
(ii) If it’s a phased or restricted deal, the influence could also be extra muted, as markets have partially discounted such an consequence.
What sectors can profit from a take care of the US?
A profitable commerce take care of the US is anticipated to learn a number of export-oriented and globally aggressive sectors in India:
(i) Pharma – Decrease US tariffs would increase exports if regulatory hurdles are eased.
(ii) Textiles and attire – Direct beneficiaries of diminished tariffs.
(iii) Auto elements – Might see improved entry and competitiveness in US markets.
(iv) IT companies – stability and readability on digital commerce guidelines would assist.
(v) Renewable power – Attainable increase from elevated US-India collaboration.
What’s your evaluation of the present valuation of the market? Is it sustainable?
As of July 2025, Indian equities are buying and selling at elevated valuations, with the Nifty and Sensex having seen a pointy run-up over the previous 12 months.
The market capitalisation stood at $4.39 trillion in February 2025, down from a peak of $5.66 trillion in September 2024, reflecting some current correction.
Present valuations stay above historic averages, pushed by robust home flows and excessive expectations for structural progress. Nonetheless, the sustainability of those ranges will depend upon:
(I)The tempo of earnings progress in FY26 and past.
(ii)Stability in international threat elements.
(iii)The flexibility of the market to soak up any detrimental surprises in coverage or earnings.
If earnings progress disappoints or international headwinds intensify, there’s a threat of additional correction.
How do you count on the Q1 earnings season to unfold? Can it probably drive the market to report highs?
Early indications counsel that the Q1FY26 earnings season can be modest, with consensus estimates pointing to 2.5–6 per cent year-on-year topline progress for India Inc., and margin enchancment in choose sectors like auto, shopper durables, FMCG, pharma, and energy.
Nonetheless, income progress is anticipated to be decrease than in earlier quarters, and margin pressures persist in banks and rate-sensitive sectors.
Except there are important constructive surprises, the earnings season is unlikely to drive the market to new report highs within the close to time period.
Most brokerages are hoping for a extra sustained rally within the second half of FY26 (H2FY26).
When you have been to speculate ₹1 lakh on this market, which sectors would you go for? What are your prime picks from these sectors?
If I have been to speculate ₹1 lakh within the present market, I’d give attention to sectors with a mixture of structural progress drivers, export potential, and relative valuation consolation:
Most popular sectors:
(i)Prescription drugs: Benefiting from international demand and potential tariff reduction.
(ii) Textiles and attire: Gaining from US tariff adjustments and export competitiveness.
(iii) Renewable power: Supported by coverage tailwinds and international collaboration.
(iv) Choose financials (banks/NBFCs): Benefiting from home consumption and credit score progress.
(v) Client durables: Driving on city demand and margin restoration.
Prime inventory picks
(i) CEAT: High quality and earnings upgrades. Technically robust with no near-term resistance.
(ii) Union Financial institution of India: Enhancing financials and constructive momentum. Revival in rural demand and improved earnings. Optimistic momentum because of the new CEO.
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Disclaimer: This story is for instructional functions solely. The views and proposals expressed are these of particular person analysts or broking companies, not Mint. We advise buyers to seek the advice of with licensed specialists earlier than making any funding choices, as market circumstances can change quickly and circumstances could range.
