All Sectors To Register Positive Revenue Growth, Says Morgan Stanley's Ridham Desai — Check His Top Picks

With the earnings season already upon us, Morgan Stanley India's Managing Director, Ridham Desai, expects all ten sectors in his firm's coverage to deliver positive revenue growth in the third quarter of the financial year ending March 2026.

In his latest strategy note to investors, Desai has pointed out that the street is expecting India Inc. to deliver a mid-single-digit rise in revenue and profits, alongside a mild expansion in margins.

Desai added that the Indian market is currently in a transition phase, as it looks to enter a phase of higher earnings growth, backed by sustained policy stimulus.

Ridham Desai is not the only market expert to point out policy stimulus playing a key role in corporate earnings growth during the second half of FY26, as commentators such as Gautam Duggad of Motilal Oswal has also echoed a similar sentiment.

Nevertheless, the Morgan Stanley top boss believes all ten sectors will register positive revenue growth in the third quarter.

Desai revealed that the sectoral growth trend will be led by communication services, consumer discretionary, and industrials.

These sectors will lead the pack in terms of revenue growth, whereas the energy space may report the weakest revenue growth among all sectors.

However, he points out that the breadth of margin expansion will remain low.

This comes against the backdrop of Desai releasing a strategy note earlier, where he outlined a bullish case for Indian markets.

Morgan Stanley suggests India's growth indicators are currently ahead of consensus estimates, which bodes well for the market, as it signals positive earnings revisions that, in turn, could boost investor sentiment.

Morgan Stanley's strategy appears to pivot towards domestic cyclicals rather than defensives or external-facing sectors. Consequently, the firm has placed an 'overweight' rating on financials, consumer discretionary and industrials.