Axis Mutual Fund’s CIO R. Sivakumar forecasts a stronger earnings cycle for Indian equities in FY27, backed by better corporate profitability and export growth. The firm prefers large private sector banks and advises investors to prioritize fundamental growth over short-term market momentum.
Axis Mutual Fund has expressed optimism about the path for Indian corporate earnings as the economy moves into the FY27 cycle. According to Chief Investment Officer R. Sivakumar, businesses are showing improved profitability, which should act as a foundation for market stability even as global economic factors create noise.
The expected earnings recovery is largely linked to two key drivers. First, companies are finding ways to operate more efficiently, which helps increase their profit margins. Second, the export environment, which had been slow in previous periods, is showing renewed signs of life. This shift helps provide a buffer for companies, especially when domestic demand shows natural ups and downs.
For portfolio strategy, the fund house continues to view large private sector banks as a strong segment. These institutions generally have the financial health required to support the ongoing expansion in business projects. The fund house suggests that investors should focus on these solid foundations rather than trying to chase stocks that are rising simply because of short-term market hype.
Investors are currently facing a market where external forces, such as fluctuating interest rates in the United States, often impact how money flows into emerging markets like India. While recent selling by foreign portfolio investors has been a challenge, the rising strength of domestic institutional investors, such as mutual funds and insurance companies, is helping to balance these outflows. This shift in market participation is reducing the impact of global volatility on Indian stocks.
The core message for investors is to avoid speculative stocks that lack underlying profit support. Looking ahead, the manufacturing and industrial sectors, supported by government infrastructure initiatives, are expected to be major contributors to corporate earnings. Investors may track how these sectors perform as government spending translates into real business results in the coming quarters.