We continue to expect narrow earnings growth. Analyst estimates have been cut ~4% in the last quarter, and while consensus still projects ~12.5% growth for FY26, we see that as aggressive. One to two more cuts could come by Jan–March 2026 before growth picks up. For the next cycle to sustain, both supply and demand need to turn. Private capex is showing early signs of recovery, but ~70% is concentrated in 8–10 large companies in mining, metals, and Reliance. For a broader impact, demand also has to pick up.

While near-term levers are limited, the Jan 2026 pay commission — the first in a decade — should lift wages and consumption. Until then, we expect earnings compression and fewer companies driving growth, making stock and sector selection critical as we position for the cycle expected to start in 8–9 months.