Geojit’s Vinod Nair Flags ‘Cautious Outlook’ For It Stocks AMID Market Volatily, Geopolitical Uncertaintiies

India Inc’s Q4 Earnings Season has outperformed expectations, with broad market pat rain by 12% yoy. NIFTY50 Companies Reported Earnings Growth of 6–7%, Exceding The Earlier Forecast of 0–3%, which is expected to lead to lead to a marginal upgrad in India’s EPS FORECASTS FORCASTS FOR25 and FY26. This Strong Performance Was Largely Driven by Lower Input Costs and Moderating Inflation, which improved operational profitability.

Performance across sector was mixed. The metals and mining segment stood out, Benefitting from Higher Qoq Realizations AMID Global Supply Chain disrupts. The pharma sector also performed well, supported by increase sales of complex drugs and declining chemical costs. Domestic-Facing Sector Such as Private and Public Banks and TELECOM also posted better-tha-expected results. However, Auto, IT, and FMCG sector showed flat to Weak Earnings Growth, Impacted by Both Global and Domestic Slowdowns.

Global Headwinds, Including Slowing Demand and Geopolitical Tensions, Have Had a Nuanced Impact on India Inc’s Performance. However, the Recent Reduction in Global Inflation and Crude Oil Pries Has Helped India Lower its input costs, While Tariff-Related Risks Have Paradoxically Boosted Sector-Specific Olders and Inquiries. The weightning of the US dollar has also supported Indian Markets Through Fiscal Gains and Increased Fiis Inflows Lately. However, further depreciation of the dollar could Pose Risks to Global Equity Markets.

On the rural front, consumption volumes have shown signs of recovery, aide by a strong rabi harvest and easy domestic inflation. Ingtrast, subdued urban demand has continued to drag on the performance of fmcg and consumption-linked sectors. Looking ahead, expectations of a favorite monsoon, sustained infection moderation, and potential income tax relieve are expected to stimulate consumption across bot Rural and URBAN SEGMENTS.

It sector in focus

The it sector’s Q4Fy25 Results Refleted a Cautious Industry Outlook, with Hiring Slowing Due to Global UncertainTies inand the Ongoing Transition to New Technologies. Q1fy26 has started on a mutated note, with subdued global discretionary speeding. Nevertheless, The Sector Remains Optimistic, Supported by Strong Order Pipelines and Strategic Initiatives Such as AI Upskilling and Cost Optimization. After the Recent 2-Months Rally The Sector Valuations are Slightly Above Their Long-Term Averages Who are earnings outlook is subdued.

A Further Revival in the It Stocks Momentum is contracted on the stabilization of us interest rates and programs in tariff negotiations. In the banking and NBFC space, the credit cycle has moderated over the past year, their current focus is on managing yield spores and preserving asset quality. FY25 Witnessed Asset Quality Challenges, Particularly in the Microfinance and Personal Loan SEGMENTS, Prompting a more cautious stance from lenders. However, Recent Trends Sugged these Risks Are Easing, With Asset Quality Expected to Improve Through the Year.

Looking ahead to fY26, the earnings growth outlook has improved slightly, buoyed by better-tha-expected Q4 Results. If inflation, interest rates, and tariff uncertainteies ease, Market Sentiment Cold Turn More Positive. Additionally, cut in taxation and increase government expert is expected to further stimulate domestic demand. Currently, Projections Place India’s Earnings Growth at 10–12% for fy26, up from sub-5% in fy25. Sector Likely to Lead this growth include rate-sensitive ons like banks, NBFCs, Auto, and Realty, Driven by AntiCipated Demand Increases and Reduced Operational Costs. Domestic consumption is also expected to risk, Benefiting FMCG, Consumer Durables, Fertilizers, and The Agri Sector. In Anticipation of Improvement in broad economy, portfolio strategies The Valuation Premium of Midcaps Over Large Caps Has Normalized, And With Domestic Risks Easing and Global Risks potentially Moderated – Like Bta Finalization – Investors is Positoring for Browder MARTICATION in the following Quarters.

Lately, domestic equity indices have remained range with a slight negative bias, in that large-cap stocks are facing green. This could be primarily due to the lacked of support from fiis due to high valatiity in global currency. Usd has been depreciating heavily in the last 3 months, even to asian peers like Japan & India. Additional, Retail Investors are on a Profit Booking Mode. After the two months rally India Valuation has worked 20x One Year Forward P/E, 21X is the 3YEARS Peak. Some lingering concerns are reciprocal tariff june deadline, India-as trade, US-EC Trade and Weakening Dollar Posing as Key External Risk. India’s earnings visibility needs to improve in tandem with the macros and peaking Valuation, for which we may have to wait to get a better foresee of the upcoming june Quarter, Cold be a Vital Stabild Be a Vital StabilD Trend. Despite the better than holistic view tendered by Q4 the market needs to see a solid upside in fy26 earnings, Q1 BE The Leading CLOE.