• IT sector outlook: The software sector faces severe de-rating and a shift toward an ex-growth phase due to rapid AI disruption in coding, making every rally a selling opportunity.
• Macro and earnings: Although fourth-quarter earnings beat expectations in autos, banks, and cement, sustained Nifty earnings growth—projected at high single digits for FY27—requires falling oil prices and rupee stabilization following recent 7% to 8% currency depreciation.
• Portfolio growth threshold: Investors should adopt a barbell strategy targeting platform and EMS companies capable of delivering at least 20% earnings growth to avoid foreign institutional outflows, balanced with value plays in select banks and commodities.
• Auto and pharma: Sentiment is constructive on autos with a preference for electric two-wheelers due to declining ownership costs, while pharma remains a bottom-up market where Sun Pharma's consolidated earnings growth may be constrained to single digits post-acquisition.