He said improving demand trends, double-digit revenue growth and healthy earnings across several sectors are creating opportunities despite a mixed broader market.
Agarwal expects the market to remain stock-specific rather than driven by broad sectoral moves. He believes consumer discretionary, non-banking financial companies (NBFCs), select banks and pharma offer opportunities, while investors should continue focusing on companies with predictable earnings, quality businesses and reasonable valuations.
“The earnings season has been pretty strong, especially on the mid and small, where the earnings growth is almost 20%. Even for Nifty, after a long time, we are seeing a double-digit earnings growth,” Agarwal said. He added that the return of double-digit revenue growth was an encouraging sign as it points to improving demand conditions.
According to Agarwal, the market remains a very bottom-up stock picker’s market, where investors need to identify companies that meet his investment framework of predictability, quality and valuation instead of making broad sectoral bets.
Among sectors, he highlighted consumer discretionary as the strongest area this quarter, covering segments such as jewellery, automobiles and retail.
Agarwal also remained constructive on financials. He said banks continue to report healthy growth and manageable asset quality, although valuations differ across lenders. He added that several NBFCs have returned to 30% or higher assets under management (AUM) growth with limited stress on bad loans.
Beyond financials, he said pharma remains a favourable long-term theme, though investors should be selective given the diversity of companies within the sector.
Supporting his positive view on consumption, Agarwal pointed to strong automobile sales and goods and services tax (GST) collection trends.
For the full interview, watch the accompanying video
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