On the quality side, the brokerage highlights Birlasoft again — along with large-cap names such as TCS, Infosys, Bharti Airtel, Hindustan Unilever, and Wipro — for their strong free cash flow generation, return on equity above 12%, and valuations still below long-term averages. These companies, Emkay said, combine financial resilience with consistent profitability and could offer relative safety as markets navigate macro uncertainties.
The broader market, meanwhile, has come under pressure after fresh trade actions by the US sparked fears that the conflict is expanding beyond goods to include services — a crucial pillar of India’s economy. A hike in H1B visa fees and a 100% conditional tariff on pharma imports had only a limited direct impact on Indian companies, but the escalation has rattled investor sentiment.
Emkay expects markets to remain volatile in the near term until a trade agreement is reached between India and the US. Progress is underway, with the Indian commerce minister currently in Washington to advance negotiations, but the brokerage notes that repeated delays have kept investors cautious. It believes a deal will eventually be sealed and that many of the measures announced could be rolled back, though the market is likely to reprice only after the agreement is finalised.
Despite the uncertainty, Emkay sees opportunities in autos, consumer discretionary, capital goods, and NBFCs — sectors it describes as “good places to hide” until sentiment improves. It remains particularly optimistic on consumer discretionary plays, buoyed by early signs of demand revival following the introduction of GST 2.0.
Interviews with passenger vehicle and two-wheeler dealers point to robust festive season sales, with volumes expected to grow 20–25% year-on-year between September and November. Price cuts have spurred demand for entry-level vehicles, especially among first-time buyers, while some consumers are also opting to upgrade to premium models. EV demand has remained stable despite changes in pricing.On the back of these trends, industry growth expectations for FY26 have been revised up to 4–5% for two-wheelers and 7–8% for passenger vehicles. Dealers expect momentum to remain strong through the festive period before normalising later in the year.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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