Q4 Earnings Outlook: Prateek Agrawal of Motilal Oswal AMC shared his outlook exclusively on ET Now. He talked about sector rotation, investment strategy, and where opportunities could emerge in the coming months. Go through the article to understand which sectors may lead the next leg of market performance and how investors should position themselves in a volatile global environment.
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Q4 Earnings Outlook: Which sectors can deliver double-digit growth despite geopolitical risks?
When asked about Q4 earnings season, which sectors or segments does the expert believe can continue to grow at healthy double-digit rates despite geopolitical risks and macroeconomic challenges? Here’s what Prateek Agrawal highlighted.
If the issue is a sharp rise in oil prices and that situation is unsustainable, considering we are spending nearly USD 7 billion a month. Expect greater policy focus on coal. It may sound surprising, but coal is a resource we have in abundance. We need electricity, and for a country of 1.45 billion people, it remains one of the cheapest sources of power. Alongside coal, we may also see increased emphasis on coal gasification, compressed biogas, solar, wind and gas, the expert said.
Prateek Agrawal of Motilal Oswal AMC further highlighted that there will also be a continued shift away from internal combustion engine vehicles toward electric vehicles. India has already achieved close to 100% railway electrification, and similar initiatives could expand into other sectors.
As electrification accelerates, electricity demand is likely to grow faster than economic growth. Historically, power demand moved broadly in line with GDP growth, plus or minus half a percentage point. Going forward, that gap could widen on the upside.
In such an environment, countries also look to reduce imports and increase exports. One way to achieve this is by promoting domestic manufacturing and encouraging import substitution.
Therefore, expect more initiatives aimed at replacing imports, including cheaper land, Production Linked Incentive (PLI) schemes, revenue-based incentives and similar policy measures.
From Russia-Ukraine to Iran Conflict: Why defence could be long-term growth theme
The nature of warfare is also changing. The conflict between Russia and Ukraine represents a more traditional form of warfare, whereas the confrontation involving the West and Iran demonstrated a very different dimension. Countries across the world are likely to strengthen their capabilities in response. This creates a multi-year growth opportunity, not just in India but globally.
Also, themes that are relatively insulated from oil-price volatility, such as digitalisation and the ongoing shift of household savings toward capital markets, are expected to continue gaining momentum.
Also read: Multicap vs Flexicap Mutual Funds: Which scheme can better handle market volatility?
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
