Helios India CEO Dinshaw Irani expects Indian markets to outperform emerging peers as earnings growth resumes. He highlights the MSME sector as the primary engine for future earnings, while cautioning investors to monitor global risks like energy inflation and extreme weather patterns.
Dinshaw Irani, Managing Director and CEO of Helios India, has expressed an optimistic outlook for the Indian stock market, projecting that it will outperform other emerging Asian and global markets. This positive sentiment follows a rebound in earnings growth that began in the September 2025 quarter, reversing a previous period of stagnant performance. Recent market data from June and July 2026 suggests this trend of outperformance remains intact.
Focus on MSME Growth Drivers
Irani points to the Micro, Small, and Medium Enterprises (MSME) segment as a critical driver for the next phase of corporate earnings. While many large-cap sectors are navigating complex structural transitions or facing high market penetration, the MSME space is seen as having more room to expand. He highlighted several areas within this segment that are well-positioned to benefit from domestic economic policies. These include precision engineering, auto ancillaries, and textiles, which are gaining from global outsourcing trends. Additionally, companies involved in domestic logistics, food technology, and businesses supported by the government’s Production Linked Incentive (PLI) schemes are identified as potential contributors to this growth.
Global Risks and Market Challenges
While the domestic earnings story shows potential, the report also emphasizes significant external risks that could disrupt market sentiment. A primary concern is the potential for conflict escalation in West Asia. If such an event were to occur, it could lead to a sharp rise in global oil prices, causing higher inflation and weakening demand across energy-importing economies like India.
Another environmental factor highlighted is the risk of a 'super El Nino.' This weather pattern could negatively impact monsoon cycles, which remain vital for Indian agriculture and rural demand. Investors should note that extreme weather often leads to supply-side constraints, which can affect the profitability of consumer discretionary companies.
Strategic Shifts in Portfolio Views
Irani also expressed a cautious view regarding the Information Technology (IT) sector, suggesting that investors remain wary. The concern stems from the disruptive impact of Artificial Intelligence (AI) on traditional IT revenue models, which may create uncertainty regarding long-term growth margins. As the market moves forward, investors will likely monitor how corporate earnings evolve relative to these global pressures. The key monitorable will be whether MSME companies can successfully convert domestic growth opportunities into actual profit, especially if raw material costs or inflation levels fluctuate due to external shocks.