Amthe said the brokerage upgraded its market stance from ‘neutral’ to ‘overweight’ in early October after 18 months, citing improving macro indicators and policy support.
“We are looking at a base case upside of around 10%, taking the Nifty to 28,000 by December 2026, and in a bull case, the index could rise up to 19% from current levels,” he said in an interview with ET Now.
Liquidity and policy support are fueling market sentiment
Amthe credited the RBI’s liquidity infusion and the government’s GST rationalization and capex measures for reviving market momentum.
“The government and the RBI have provided ample ammunition to address the recent macro weaknesses. This marks a turning point after months of consolidation,” he noted.
He added that the ongoing interest rate easing cycle, coupled with the recovery in domestic consumption, could further cushion equity markets from global volatility.
Earnings season: trough phase, pay attention to management commentary
Speaking about the current second quarter earnings season, Amthe said results to date have met moderate expectations, with flat revenue growth but a healthy earnings recovery (PAT).
“Only 10% of companies have announced results due to the postponed holidays, but the initial trend shows that margins are holding up better than expected,” he explains. He emphasized that management commentary will be critical in assessing the prospects for the IT, consumer and capital goods sectors.
“We are closely watching how major IT companies adapt to the AI-driven business model and how consumer companies assess demand after festivals,” Amthe added.
He expects the ongoing earnings downgrade cycle to bottom out in the second quarter of FY25, with stabilization and possible upgrades from the fourth quarter of FY25 onwards.
Metals back in focus; InCred upgrades Tata Steel, JSPL and SAIL
Amthe said InCred Capital has made an overweight in metals, driven by improving domestic demand and stable prices. “We have upgraded the ratings of Tata Steel, JSPL and SAIL to ‘Add’ ratings, compared to earlier cautious views,” he revealed.
He expects the steel cycle to remain resilient, driven by the recovery in private capital investment and the limited downside of global protectionism.
“Profitability in the steel segment appears protected, while demand is likely to increase as domestic consumption rises,” he noted.
However, Amthe maintained a cautious view on Jindal Steel due to its high valuations, even as the broader metal index continues to outperform.
Broader outlook: Earnings stabilization will drive the next leg of the rally
According to Amthe, markets have moved beyond the consolidation phase and are entering a more profit-oriented rally phase.
He believes corporate profits will start to improve from early 2025 in cyclical sectors such as metals, banking and industrials.
“Once earnings stabilize, markets will gain further strength and investors should focus on sectors with visible margin recovery and operating leverage,” he said.
#Nifty #reach #profit #bottomed #Pramod #Amthe