Baldev Prakash, CEO of SBICAP Securities, expects strong Q1FY27 earnings across sectors like banking, auto, and defence. He advises investors to adopt a stock-specific, bottom-up approach while monitoring geopolitical risks and monsoon progress for market direction.
Baldev Prakash, managing director and CEO at SBICAP Securities, has outlined his outlook for the Indian stock market for the remainder of 2026. According to his assessment, while global geopolitical tensions, particularly in the Middle East, remain a point of interest, domestic investors should focus primarily on upcoming Q1FY27 corporate earnings, management commentary, and the progress of the monsoon season to gauge market health.
Earnings Outlook and Sector Trends
Prakash expects strong earnings momentum in sectors such as banking, non-banking financial companies (NBFCs), auto ancillaries, metals, and consumer discretionary areas like hotels and jewellery. The defence, capital goods, power, and electronic manufacturing services (EMS) sectors are also identified as potential areas for growth. In contrast, the outlook for oil marketing companies and the cement industry suggests profit margins may come under pressure due to rising crude oil prices. Consumer staples companies are expected to show modest improvements as firms implement price hikes to manage packaging costs.
IT Sector and AI Integration
The IT sector is projected to deliver more muted earnings growth, although specific players remain in focus. Reflecting on the recent performance of Tata Consultancy Services (TCS), Prakash noted that results were largely in line with expectations, supported by strong deal momentum with annualized order bookings exceeding $40 billion. A notable trend is the integration of artificial intelligence (AI) into large-scale transformation projects. This shift is reportedly allowing companies to secure larger contracts and improve project execution. SBICAP Securities maintains a positive long-term outlook on several IT-related firms, including OFSS, Coforge, TCS, FSL, Mphasis, and Infosys, while waiting for the broader sector performance to provide further clarity.
Managing Market Risks
Despite concerns regarding US tariffs on metals imposed in June 2026, SBICAP Securities views this primarily as a short-term sentiment issue rather than a structural threat to the Indian metals sector. Domestic steel companies are expected to rely on local demand and ongoing capacity expansions rather than US export markets. Furthermore, Prakash warned that if crude oil prices sustain levels above $120-$130 per barrel, it could lead to inflationary pressure in the US, affecting global bond yields. For individual portfolio management, the firm suggests maintaining a base of 5-10% in gold, with a long-term asset allocation model of 70% equity, 20% debt, and 10% in precious metals, alongside ensuring adequate emergency cash reserves.