Expert view: Vinit Bolinjkar, Head of Research, Ventura, says the Indian stock market is volatile due to US tariffs and FII selling. In an interview with Mint, Bolinjkar says he is cautiously optimistic about Nifty EPS growth at 8-16% YoY—the strongest in 8 quarters—driven by earnings upgrades after five downgrade quarters, though global volatility caps upside. Edited excerpts:
What is keeping the Indian stock market volatile?
Nifty reached record highs in early 2026 but entered a consolidation, lacking sustained rally momentum. FII outflows dominate, with holdings dropping to a 15-year low near 17% after pulling ₹2 lakh crore from sectors like financials and IT, plus fresh ₹12,000 crore exits in January amid global risk-off.
US-India trade tensions escalated as President Trump’s team cited PM Modi’s unreturned call, imposing 50% tariffs on Indian steel, textiles and electronics. India counters with ongoing talks, but uncertainty weighs on exports.
Reliance is under pressure amid capex delays, while HDFC Bank faces NIM headwinds. Muted earnings growth (8–16% versus 20% expected), Middle East geopolitical risks, AI bubble concerns, elevated input costs (oil above $80/bbl), and rich valuations (Nifty near 24x PE) are also weighing on sentiment.
How do you assess the Q3 FY26 earnings trends?
We are cautiously optimistic with Nifty EPS growth at 8-16% YoY—the strongest in 8 quarters—driven by earnings upgrades after five downgrade quarters, though global volatility caps upside.
Key factors, such as the rupee at 86 per dollar, boost IT and pharma margins, festive demand aids consumption, and infra spend lifts industrials. Risks from the US slowdown and raw material inflation remain.
Please share your outlook on the banking sector.
The sector looks poised for 10-11% credit growth (retail 15%, MSME 12%, corporate 8%). NIMs may stabilize via CRR cuts. Asset quality will peak with GNPA at 2.3-2.6% (lowest in decades).
PSBs outperform on loan momentum (SBI 13% growth) and government recapitalisation, while private banks excel in RoA/RoE.
What sectors are you positive on?
Multi-year themes align with India’s 8% GDP, capex cycle, and PLI Schemes. BFSI can benefit from the credit boom and the NBFC revival. Consumption or discretionary spending can benefit from rural recovery (monsoon boost) and premiumization. Defense and manufacturing look attractive due to order execution and the China+1 factor.
Moreover, green energy, on the prospects of 450 GW renewables by 2030 (solar 5 times), tech, IT, and telecom, due to AI pivot, 5G rollout, and exports rebound, also look attractive.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
