India Inc. will likely post a high single-digit earnings growth in financial year 2026 amid high valuation and uncertainty, according to Old Bridge AMC Chief Investment Officer Kenneth Andrade. India Inc. delivered a double-digit earnings growth in FY25.
The big concern about Indian markets is valuation. It is the case even for large-caps apart from mid-cap and small-cap segments, Andrade told NDTV Profit in a conversation on Friday.
"Small caps are expensive, but 20% of them are still worth investing in. The same applies for mid-caps," he said.
Indian markets are more susceptible to global macro events because they are placed under the top end of the price-to-earnings-multiple band. Andrade does not see any significant decline in Indian markets.
As long as India Inc's cash-flow-positive nature of balance sheets exists, a drastic fall will not happen, he added.
Consumption segment will be good moderately as a significant correction has happened. Old Bridge AMC suggests examining urban-consumption-focused companies to invest in this space. "I think that is where all the cash flows are," he said.
Amid the slowing domestic economy, market participants need to discover segments which are doing well. The breadth of the market will narrow. Now, investors need to be clear about their goals and tweak their portfolio accordingly. Old Bridge AMC has adopted this strategy, according to Andrade.
Global events have always impacted markets. However, fundamentals of companies are the most important factor in determining the actual state of the market. Investors should find companies that are efficient and have a business model to navigate the current situation, Andrade said.
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