Dipan Mehta, Director, Elixir Equities admits to being stunned by the latest correction. “Even I’m perplexed. I used to be very optimistic from Diwali and into the New 12 months and anticipated the earnings season to convey good tidings. Not less than in the meanwhile, I’ve been proved fallacious,” he stated. Nonetheless, Mehta cautioned towards studying an excessive amount of into short-term market actions, noting that volatility is an element and parcel of fairness investing. He stays optimistic that the present earnings season may transform one of many higher ones seen within the final seven to eight quarters and doubtlessly lay the inspiration for a recent rally past earlier highs. Whereas markets are but to decisively cross these ranges, he believes 2026 may nonetheless form up as a robust yr for portfolios, even when traders must endure a section of turbulence within the close to time period.
On the theme of financialisation of financial savings, Mehta prefers selective publicity slightly than a broad guess on asset administration firms (AMCs). Whereas acknowledging that AMCs stay a great long-term story, he believes wealth administration companies provide larger flexibility and resilience. He pointed to the sturdy efficiency of firms like Anand Rathi Wealth and 360 One, in addition to mutual fund distributor Prudent, as higher performs on this development. In accordance with him, AMCs face intense competitors and periodic regulatory interventions on pricing and commissions, whereas wealth managers profit from diversified enterprise fashions. He additionally flagged stockbroking platforms as an rising alternative, citing Groww’s speedy scale-up and its potential to diversify its product choices. That stated, Mehta added that he would proceed to remain invested in AMCs and expects one other sturdy yr for the phase.
After a chronic interval of underperformance, Mehta can be turning incrementally optimistic on the IT providers sector. “I get supportive on IT and step by step extra optimistic,” he stated, highlighting synthetic intelligence as the subsequent progress catalyst. Whereas he’s unsure whether or not AI can instantly drive double-digit progress for giant IT providers companies, he believes a number of midcap firms are properly positioned to profit from this transition. Tata Elxsi’s latest efficiency, aided by a revival in software-defined car initiatives within the automotive vertical, is one such instance. With valuations now affordable, investor positioning gentle, and base results turning beneficial, Mehta sees scope for IT shares to outperform after practically a yr and a half of lagging the market. For conservative traders, he believes large-cap IT names stay a secure guess, stating that AI already contributes round 6% to TCS’s revenues and is rising at a wholesome sequential tempo.
Commenting on Infosys’ quarterly efficiency, Mehta described the numbers as largely predictable, stressing that the actual focus must be on administration commentary and the contribution of AI-led initiatives. He views software program providers as a long-term play, acknowledging that even when 2026 proves muted, a tipping level pushed by AI adoption may emerge later this yr or early subsequent yr, resulting in an enchancment in progress charges.
Trying throughout sectors, Mehta expects earnings restoration to be broad-based. Excluding exporters closely depending on the US market, he believes most domestic-facing industries ought to put up wholesome numbers, aided by a robust festive and wedding ceremony season. Autos, cement, metals and, over time, IT providers are among the many sectors he expects to do properly. He’s notably upbeat on metals, citing larger costs and the potential for sturdy outcomes from firms equivalent to Vedanta, Hindustan Copper, NMDC and Nalco. Banking and NBFCs additionally seem like on strong footing, supported by encouraging pre-quarter updates and sturdy enterprise momentum, as seen in Bajaj Finance’s December-quarter efficiency. In Mehta’s view, if earnings proceed to enhance, capital flows—home or abroad—will ultimately comply with.
On Reliance Industries, nonetheless, Mehta strikes a extra cautious notice. He believes the inventory’s outlook is much less about near-term earnings and extra about its evolving company construction. As Reliance more and more resembles a holding firm, the prospect of separate listings for Jio and the retail enterprise raises the potential of a holding firm low cost being utilized to the guardian. Whereas the oil-to-chemicals enterprise stays a robust money generator, Mehta questions whether or not it deserves a better valuation a number of. He argues {that a} formal demerger, permitting shareholders to instantly personal Jio and Reliance Retail, would unlock most worth, although administration has thus far proven little inclination to pursue that route. Nonetheless, he concedes that Reliance’s administration has a historical past of unusual the market and that sturdy working situations throughout its core companies may but translate right into a standout quarter. For now, Mehta’s strategy stays earnings-focused. Markets might sway unpredictably within the brief time period, he says, however sustained enchancment in company earnings is what in the end drives sturdy rallies.
