Trilok Agarwal of Ambit Capital highlighted that the Union Budget 2026 is likely to focus on a delicate balance between boosting consumption, maintaining fiscal consolidation, and supporting capital expenditure (capex). These three themes are expected to shape government policy and market sentiment for the year ahead.
Earnings Outlook for FY27
- Agarwal expects FY27 EPS growth to be in the low double digits, rather than the mid-teens seen in previous years.
- This implies a normalisation in corporate earnings rather than an acceleration.
- Investors should adjust expectations accordingly, focusing on quality of growth rather than headline EPS numbers.
Key Market Implications
- Emphasis on consumption and capex could provide support to domestic sectors like FMCG, infrastructure, and capital goods.
- Fiscal prudence may limit aggressive stimulus, impacting discretionary spending.
- Market participants may need to focus on sectors benefiting from capex and infrastructure push rather than broad market rallies.
Trilok Agarwal’s Takeaways
- Budget 2026 will balance growth with fiscal responsibility
- Earnings growth expected to moderate in FY27
- Markets should anticipate earnings normalisation rather than acceleration
Key Highlights
- Budget 2026 themes: Consumption boost, fiscal consolidation, capex
- FY27 EPS growth projected in low double digits
- Earnings normalisation expected, not acceleration
- Sectors tied to capex and infrastructure may outperform
⚠️ Disclaimer: This article is for informational purposes only and does not constitute investment advice. Market performance can vary based on multiple economic factors.
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