All bets on second half as Q2 disappoints: Mint survey

Of 36 fund managers, CEOs, and research heads surveyed between 10 and 15 October, around 83% of the respondents, including those from Kotak Securities and Emkay Global, expect the September-quarter earnings growth to remain moderate and broadly in line with projections. Policy-led momentum is likely to pick up only from the December quarter.

“Despite global headwinds, India’s domestic growth remains resilient. FY26 will be stronger than FY25, and FY27 could see double-digit earnings growth supported by GST 2.0 reforms, government capex, and policy tailwinds,” said Dhiraj Relli, managing director & chief executive officer, HDFC Securities. He expects Nifty-50 firms to post 6–7% profit growth this quarter (July-September), with valuations already pricing in nearly 20x FY27 earnings.

Neeraj Chadawar, head of fundamental and quantitative research at Axis Securities, expects Nifty 50’s revenue, operating income, and net profit to rise 9%, 4.8%, and 8%, respectively, year-on-year, led by telecom, industrials, and utilities in Q2. However, banks and FMCG firms could face margin pressure, with a broader recovery likely only in the second half, he said.

About 14% of the survey respondents foresee muted second-quarter earnings amid global volatility and rising costs, while just 3% expect a positive surprise driven by a good monsoon and fiscal support.

Preliminary estimates indicate India Inc’s topline may have grown 5–6% in Q2, dragged by weak performance in power, coal, IT services, and steel, which together account for nearly a third of corporate revenue. “The IT sector grew barely 1% amid project delays and visa issues, while steel rose 4% despite softer prices,” said Priti Arora, business head of Crisil Intelligence. In contrast, autos, cement, and pharma led the rebound, supported by festive demand and export resilience.

A Mint analysis of the first 228 companies that have declared their Q2FY26 results so far indicates a very sombre start: aggregate revenues stayed flat, while net profits grew 1.4% year-on-year.

Gold’s glitter to fade?

Meanwhile, gold’s glitter divides experts, despite the yellow metal already outperforming equities this year due to geopolitical instability. The consensus is split on whether gold can maintain its shine: 30% of the participants, including Saion Mukherjee, India equity research head at Nomura; and Radhika Rao, senior economist at DBS Bank, agreed that it will. While 42% remain partially convinced, the remaining 28% are skeptical or uncertain.

Adding to this divide, the possibility of the metal hitting a new milestone of ₹1.5 lakh per 10g by FY26-end remains doubtful, with 64% unsure due to global policy and inflation volatility.

Ponmudi R, CEO of Enrich Money, however, remains bullish, stating, “A weaker rupee and firm global prices create room for further upside.” Brokerages and institutions like Centrum Broking and Mirae Asset Sharekhan echoed this view.

Conversely, 17% of analysts, including those from Angel One, expect easing risk to cap bullion gains.

IPO optimism firm

In stark contrast to other outlooks, experts’ confidence in the primary market remains strong. Nearly 53% of the respondents, including Vikas Gupta, CEO of OmniScience Capital, believe IPO momentum will stay strong through FY26, buoyed by liquidity and retail participation. Achin Goel, PMS fund manager at Bonanza Group, was optimistic, citing, “India has already raised over $14 billion from IPOs in 2025, ranking among the top four globally.”

Others predict a more selective environment. Saurabh Rungta, CIO of Avendus Wealth, cautioned: “Post-listing disappointments will prompt sharper scrutiny on profitability and governance.” However, none of the experts predicted a slowdown in IPO activity.

Festive sentiment under watch

About 58% of the experts surveyed believe GST rate cuts have overestimated festive demand revival, while 25% disagreed and 17% remained unsure—highlighting the market’s cautious tone in the festive quarter.

“While GST rate cuts can provide a short-term boost to discretionary spending, the broader revival in consumer demand depends on rural recovery, inflation trends, and income sentiment,” said Ajit Mishra, SVP-Research at Religare Broking “Festive demand has been mixed across categories—premium segments are seeing traction, but mass-market consumption remains subdued.”

Mixed outcomes

Mint’s market survey reviewed the most pressing economic questions of the time, but a year-long journey proves one thing: reality often upends consensus. Expert predictions, often colored by optimism, become a futile exercise amid persistent geopolitical uncertainty.

In Mint’s first survey held around Diwali last year, 47% of respondents expected the Sensex to hit 100,000 points by March 2025, despite the market peaking in September. Since then, the index was down 2.5% at 77,414 points by the end of March. To be sure, 53% of experts doubted the target, citing global headwinds as the key risk.

But when Donald Trump imposed higher-than-expected tariffs and a penalty on Indian exports in July, 76% of respondents in the fourth survey still expected a balanced US-India trade deal to be concluded soon. Only 3% feared a detrimental outcome, and rightfully so. Since then, Trump has curbed skilled worker inflows by raising H-1B visa fees, unsettling Indian IT firms, while his 100% tariff on branded drug imports has left the pharma sector anxious. Over the past three months, US-India ties have hit repeated lows, with a trade deal still nowhere in sight.

Even at this juncture, 75% of experts in the current survey expressed confidence that US-India ties will improve by the end of FY26.

Similarly, in April, when the third survey was conducted, 57% of respondents saw India’s scale and policy stability as key to keeping global capital flows intact. Since then, foreign portfolio investors have withdrawn ₹38,538 crore from equities between May and mid-October. Just 3% worried India’s rich valuations might deter inflows versus cheaper peers like Brazil or Vietnam. But it’s South Korea’s Kospi that has stolen the global spotlight since then, rising 49% in six months, compared with the Nifty 50’s 9%. Even so, at 23x earnings, the Nifty remains the costliest major index globally.

While consensus views were overly upbeat amid harsh realities, respondents rightly anticipated the revival in capital market activity early in 2025. Despite the initial lull in the primary market, 86% of experts in the second survey (conducted in February) expected IPOs to stay relevant in 2025. While most expected them to play a more subdued role, some saw them dominating the year. So far, 81 mainboard IPOs have raised ₹1.2 trillion, compared with ₹1.6 trillion from 91 issues in 2024, according to PRIME Database.