'Growth Engines For Indian Market': D-Street Expert Bets Big On New-Age Stocks After Eternal's Robust Q1 Show

The Indian stock market's attention is on the ongoing quarterly earnings, which slowed lately after some traction from banking stocks. Market analysts believe that the upside in the first quarter earnings will be the critical point to sustain the current premium valuations.

On Tuesday, action was concentrated in select outperformers. Eternal rallied 15%, buoyed by sustained post-result momentum, while Info Edge gained 4%, riding the positive spillover from Eternal’s valuation surge.

D-Street experts say that continued profit booking by the foreign investors exerts downward pressure, while steady inflows from domestic investors could support a range-bound movement with a positive bias towards Q1 results and the India-US trade deal.

In the current market scenario, Abhay Agarwal, Managing Director, Piper Serica Advisors, told NDTV Profit in an exclusive interview that smaller companies across sectors will report better earnings results compared to the larger industry leaders in the ongoing results season.

Agarwal said he will go overweight on new-age internet stocks (Eternal, Paytm, Swiggy, CarTrade, among others) and believes the companies will see good earnings results in Q1 FY26. He added that he is positive about banks and also prefers private over public sector banks.

After Deepinder Goyal-led Eternal reported robust Q1 results, Agarwal told NDTV Profit that he is positive on the stock and that the food delivery company is "a play on the size of the market it serves." He added that with regard to the food delivery and quick commerce business, Eternal is not just focused on profitability but also on "creating the market."

"New-age tech companies will see good earnings numbers this quarter," believes Agarwal. While confirming that he will go "overweight" on the new-age internet stocks group, the market expert told NDTV Profit that the companies are a "great play on India's consumer story."

"These companies have gone through debt and emerged stronger. This is a winner-take-all market, and the new-age digital companies have operating leverage. The businesses are set for scale, and that's how investors are looking at them," explained Agarwal. According to the expert, these stocks are "growth engines" that a market like India can't miss.

While discussing other sectors, the Piper Serica Advisors leader also said he is "positive" on banks as the valuations are attractive. "Any positive surprise will re-rate the smaller banks better. However, it is heartening to see the larger banks, industry leaders, report good numbers," he told NDTV Profit.

Agarwal believes that the upcoming second quarter of FY26 will be even better for banks and the management commentary will be stronger. "We prefer private banks because they are run for shareholder value maximisation," he said.

On pharmaceuticals, Agarwal confirmed that he has been overweight on the sector for the last two years. "We are looking at innovators or the large generic exporters in the pharma sector, such as Dr. Reddy's Labs, Lupin, and Cipla."

According to the expert, these will continue to do well because they have a robust pipeline in the US. The US FDA is very supportive of Indian pharma companies. He added that the ''real action" lies in CDMOs and innovators. "The pharma sector was an outperformer last year and will remain one this year and also next year," concluded Agarwal.