In an interaction with Mahesh Bendre, Fund Manager - Equity, LIC Mutual Fund Asset Management Ltd

With Q1FY26 earnings off to a sluggish start, what are your expectations for the overall performance of India Inc this quarter?

Q1FY26 began on a subdued note, influenced by two key developments: the initiation of tariff announcements by U.S. President Donald Trump’s administration and geopolitical tensions with a neighbouring country and in the Middle East. These factors have contributed to a cautious outlook for corporate performance in this quarter. While aggregate earnings are expected to remain muted, our attention is focused firmly on management commentary. Although the geopolitical situation has stabilised, the postponement of U.S. tariffs continues to fuel uncertainty into the business environment. That said, we remain optimistic about a recovery in corporate earnings from H2FY26, driven by a revival in consumption and a pickup in the capex cycle.

With rising input costs in certain industries, are you noticing any fundamental shifts in cost structures or pricing power? Also, are there sectors where the stock price rally appears disconnected from the underlying financial performance?

Rising input costs typically exert temporary pressure on cost structures and margins across industries. However, fundamentally strong businesses with resilient operating models tend to preserve profitability. At present, we are not observing any significant structural shifts in cost dynamics or pricing power across major sectors.

Are there any emerging investment themes or structural trends that you’re particularly bullish on?

We are optimistic about emerging investment themes like Data Centres, Defence exports, Energy Transition, China+1, Semiconductor ecosystems, Solar Pump installations, etc. Consumption may be a positive surprise over the medium term as demand headwinds recede and positive catalysts in the form of lower interest rates, lower income tax, and pay commission.

What key factors do you look for while picking stocks in the current market environment? How do you ensure alignment between the fund’s investment style and the expectations of retail investors?

We integrate both top-down macroeconomic insights and bottom-up company-specific analysis to identify robust investment opportunities. With a disciplined investment horizon of 3 to 5 years, we aim to align with our investors’ expectations and focus on long-term value creation through fundamentally sound businesses.

What would be your advice to investors who are entering equities for the first time through mutual funds?

Mutual funds are best suited for investors with a long-term horizon of 5 years or more, given the inherent volatility of equity markets. For first-time investors, starting with SIPs in diversified equity funds is a simple and disciplined approach. It helps build investment habits while benefiting from market cycles. The key is to stay invested, avoid reacting to short-term fluctuations, and trust the power of compounding. Understanding your risk profile, setting realistic goals, and maintaining consistency and patience are essential to building long-term wealth through equities. At any point, investors may approach their financial advisors in case of any help required to navigate uncertainty.