India’s equity market is experiencing a mix of positive and negative trends, according to Trideep Bhattacharya, CIO of Equities at Edelweiss AMC. On the positive side, the latest quarterly results have shown much-needed earnings upgrades, supported by government initiatives and a favorable macro backdrop. This has contributed to the market’s recent growth. However, this optimism is tempered by uncertainty surrounding the India-US deal, with delays creating nervousness among investors. The sharp intraday weakness in the rupee has also added to the discomfort.
Bhattacharya notes that the direction of corporate earnings is the most important trend to watch, and it has finally begun to turn upward. He also commented on the expanding universe of platform companies in the listed market, including consumer tech, food delivery, and home-services businesses. He describes their valuations as generally expensive and says that Edelweiss AMC has adopted a more selective stance in recent months.
Bhattacharya’s assessment of these companies centers on their proximity to achieving profitability and whether management teams have a credible roadmap to get there. He notes that competitive dynamics have become more intense, with unlisted players returning to the market and leading to renewed pricing pressure and a longer runway to profitability. As a result, Edelweiss AMC has been more cautious in allocating capital to this segment.
Overall, the market is in a balanced but cautious position, with a push-and-pull between positive earnings momentum and geopolitical concerns. Bhattacharya emphasizes the importance of watching the direction of corporate earnings and being selective in investing in platform companies. With the market navigating these mixed trends, investors are advised to be cautious and keep a close eye on the latest developments. Edelweiss AMC, which manages assets worth ₹3.49 crore, is taking a selective approach to investing in the current market, prioritizing companies with a clear path to profitability.