Expert view: Vinit Bolinjkar, the head of research at Ventura, believes the Q1FY26 earnings of Indian corporates have been much better than expectations, especially on the profitability front. Bolinjkar said the Nifty 50 can reclaim the 26,000 mark in August, but negative global cues, macro data, or FII outflow can spoil the party. In an interview with Mint, Bolinjkar shared his outlook on the Indian stock market, key challenges, reasons behind the FPI (foreign portfolio investor) selloff and top stocks to buy. Here are edited excerpts of the interview:
How are you reading the Q1FY26 earnings trends? Are they below expectations? What are some key hits and misses?
Overall, Q1FY26 earnings have turned out to be quite encouraging—much better than what most of us were anticipating at the start of the quarter.
While revenue growth has remained somewhat modest, the real story has been on the profitability front.
We’re seeing a strong uptick in net profits across a broad set of companies, largely driven by input cost deflation—especially in commodities.
In fact, for many firms, profits have risen by 23 per cent to 40 per cent. This divergence, where toplines are flat but bottom lines are expanding, has clearly been the dominant trend this quarter.
We’ve seen several notable performance hits.
Waaree Renewables stood out with strong dispatch momentum and margin improvement, aligning with sector tailwinds.
HDFC AMC had a solid quarter, riding on robust market inflows and higher AUM.
ICICI Bank managed to hold its ground well despite sector-wide margin pressures, supported by healthy lending growth and stable asset quality.
Among the tech names, Coforge and InfoBeans Technologies performed strongly—similar to larger peers like Infosys—benefiting from steady growth in Europe and increasing investments in AI.
Eternal clearly benefited from lower raw material costs, and Blue Jet delivered well on operational efficiency—much like Dilip Buildcon, which reported a 94 per cent jump in profits.
On the flip side, there were some clear misses, too. Aditya Birla REIT was soft, likely due to localised weakness in demand.
Kotak Mahindra Bank’s results were a bit underwhelming, with muted credit offtake and NIM compression, something we’ve observed across several lenders this quarter.
Tata Communications had a tough time navigating weak global spending and pricing pressures.
Wendt India, tied to industrials, felt the impact of a subdued capital market expenditure cycle. InterGlobe Aviation, despite being a market leader, faced cost headwinds and a relatively sluggish recovery in domestic air traffic in the early part of the quarter.
So, to sum it up, Q1 has rewarded companies with pricing power, cost advantage, or structural tailwinds, while those exposed to funding pressures, weak demand, or global cyclicality have lagged.
Do you think Nifty has the potential to go beyond 26,000 in August?
At this stage, I’d say it’s a 50-50 probability that Nifty crosses the 26,000 mark in August.
Technically, for that to happen, the index will first need to convincingly clear the resistance zones at 24,900 and then 25,200. These are key levels where we’ve seen profit booking and hesitation in the past.
If Nifty manages to sustain above 25,200 with strong volumes and support from key sectors like banking, IT, and capital goods, then a move toward 26,000 becomes likely.
However, any disappointment in global cues, macro data, or FII flows could cap the rally. So, while the momentum is positive, it’s still a wait-and-watch scenario till we see a decisive breakout above those resistance points.
What are the key challenges for the market that we must not overlook?
There are several key challenges the market must not overlook:
The geopolitical uncertainty stemming from Donald Trump remains a significant wildcard.
The U.S. may announce abrupt and unpredictable moves—such as today’s imposition of a 25 per cent tariff on Indian goods, effective August 1, along with a penalty tied to India’s purchase of Russian military equipment and energy.
Such measures could quickly disrupt trade sentiment and market confidence.
Domestically, investors should closely monitor macroeconomic and credit trends.
July data suggests a slowdown, and economic indicators scheduled for release on August 1 will provide clarity on whether this points to short-term softness or a broader deceleration.
The sharp rise in Japanese government bond yields is another concern.
With yields surging aggressively, international capital may shift away from emerging markets toward Japan, putting pressure on equity inflows—especially for countries like India.
Together, these risks—trade policy shocks, domestic economic softening, and global yield shifts—constitute key headwinds for markets in the near term.
What are the main reasons behind the FPI selloff? When do you expect the trend to reverse?
The ongoing Foreign Portfolio Investor (FPI) selloff can largely be attributed to a combination of global and domestic factors.
First, the US market has been exceptionally strong, supported by robust economic data and a series of strategic trade deals that align with American interests.
This strength is naturally attracting capital flows back into what many investors consider the “mother market.” Second, Indian equity valuations—particularly in frontline indices like the Nifty—have become quite expensive.
The premium on Indian markets is currently very high compared to other emerging markets, which is prompting foreign investors to book profits and rotate capital elsewhere.
Some of this money is also being redirected to other undervalued markets such as China, where valuations are more attractive at this point. As for when the trend might reverse, it’s hard to pin down a specific timeline.
Much will depend on how valuations in India adjust and how global macro conditions evolve, particularly in the U.S. and China.
For now, FPIs appear to be in a wait-and-watch mode.
How do you see the valuation of Nifty and the broader market? Is it unsustainable?
Valuations of the Nifty and the broader market are certainly on the higher side right now—there’s no denying that they are demanding by historical standards.
In fact, that’s been one of the key reasons behind the ongoing FII selloff.
Foreign investors are finding it harder to justify Indian equity valuations at current levels, especially when there are relatively cheaper opportunities elsewhere.
That said, I wouldn’t call the valuations unsustainable. Despite elevated pricing and a busy primary market, domestic liquidity, particularly through consistent SIP flows, continues to provide a strong cushion.
Retail investors have been remarkably resilient, and that steady inflow is helping absorb the pressure from foreign outflows.
So while we may not be cheap, the market is still on solid ground, and valuations at this point appear to be sustainable.
What should be the investment strategy of retail investors for the next six months?
Over the next six months, retail investors should adopt a selective and sector-focused approach.
Rather than chasing momentum across the board, the strategy should be to look at pockets of value and structural growth.
Sectors like chemicals and agrochemicals are emerging as attractive bets, especially with improving export dynamics and policy support.
Pharma also looks interesting, particularly companies with a strong US pipeline or niche formulations.
On the domestic front, infrastructure remains a strong structural theme, backed by sustained government spending and private capex revival.
Additionally, the electricals and outsourced manufacturing space is seeing strong order flows and margin tailwinds.
So, a focused allocation to these themes, with a medium-term horizon, could work well for retail investors.
Please suggest some stock ideas for the next one year.
For the next one year, a selective mix of cyclical and structural stories could work well.
In the hospitality space, Royal Orchid Hotels and Samhi Hotels are well-positioned to benefit from the ongoing travel and tourism revival.
Larsen & Toubro (L&T) and KEC International remain strong infrastructure plays with healthy order books and execution visibility.
Transport Corporation of India (TCI) offers a proxy to the logistics and freight upcycle.
On the tech and niche manufacturing front, Netweb Technologies is gaining traction in high-performance computing, while Privi Speciality stands out in the speciality chemicals segment with strong export potential.
NHPC is a solid bet in the renewables and hydro space, backed by policy tailwinds and stable earnings.
Together, these names provide a good blend of growth, stability, and sectoral diversification for medium-term investors.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
