Market corrections are opportunities to accumulate assets, not reasons to panic

Harish Krishnan
CIO - Equity Aditya Birla Sun Life AMC Ltd.

How would you assess the overall Q3 earnings season so far in terms of growth, margins, and management commentary? Have the Q3 outcomes prompted any tactical or strategic changes in your sector allocation? 
We witnessed broad-based earnings revival across sectors in the recently concluded Q3FY26 earnings. Revenue growth accelerated in sectors like capital goods, chemicals, power, and financial infrastructure. The quarter marked a clear shift from the earlier uneven recovery to a much more consistent topline improvement, supported by strong domestic demand and improving Order Book execution. Overall, management commentary was constructive, with recurring themes of strong execution visibility in capital goods and infrastructure, input cost rationalisation in chemicals, and persistent demand strength in consumer and financial services sector.

From a sectoral standpoint, which segments stand out as the biggest beneficiaries of the Budget 2026 announcements?
The Budget presented by our Finance Minister reinforced India’s commitment to fiscal prudence, favouring realism over populism. This approach distinguishes India from global peers running with elevated deficit levels. The strength of the Budget lies in its credible fiscal guide path, improved capital expenditure mix, and targeted support for futureready sectors.

From a sectoral lens, the biggest beneficiaries are:
■ Infrastructure & Transport: Railways, roads, and Logistics remain front and centre, with the government announcing seven highspeed rail corridors, new freight corridors, and expanded waterways, cementing infrastructure as India’s structural growth lever.
■ Defence: Continuing multi-year momentum, defence spending is set to rise steadily, supported by stronger order books and execution visibility.
■ Digital & Technology: The launch of India Semiconductor Mission 2.0 with a ₹40,000-crore outlay positions semiconductors, advanced engineering, AI, and digital infrastructure as major winners, strengthening India’s long-term tech competitiveness.
■ Electronics & Manufacturing: A ₹40,000-crore PLI boost for electronics and deeper manufacturing incentives support India’s transition into high-value, globally competitive production.

Collectively, these themes reinforce a Budget that prioritises structural reforms, supply-chain resilience, and innovation-led growth, rather than short-term optics.

How do you view the India-U.S. trade deal from an equity market and long-term growth perspective?
The India-U.S. trade deal removes a major overhang for equity markets by slashing U.S. tariffs on Indian exports from 50 per cent to 18 per cent, restoring predictability to global trade flows and easing margin pressure for export-oriented sectors. Markets responded immediately, with analysts noting improved sentiment as the tariff rollback strengthens earnings visibility across textiles, engineering, pharma, and technology-linked manufacturing.

Beyond direct export benefits, the deal has three long-term implications:
■ Macro Stability & Growth Boost: Tariff clarity strengthens India’s standing as a stable, long-term growth market, with higher exports estimated to lift GDP by around 20 bps.
■ Financial Sector Tailwinds: Higher trade volumes and renewed investment appetite are set to benefit financials, particularly BFSI, through improved credit demand and capital flows.
■ Revival in Foreign Inflows: With active global funds’ India exposure near two-decade lows, the return of net FII inflows in early February 2026 signals the beginning of sentiment reversal. In essence, the trade deal de-risks India’s external environment, restores global competitiveness, and meaningfully improves the medium-term equity outlook. It turns a key geopolitical drag of 2025 into a structural positive for 2026 and beyond.

Do you view the current correction in base metals as a cyclical phase or a sign of a deeper structural slowdown, and at current valuations, do you see opportunities emerging or do risks still dominate?
India’s steel demand has seen four straight years of double-digit growth (11-14 per cent) over FY21–25, given surging infrastructure spending, housing Construction, and industrial spending. India has been the fastestgrowing steel market globally and is now the second largest steel producing country in the world. However, even after such strong demand growth, India’s per capita steel consumption as of FY25 stood at 97 kg, sharply below the global average of 214 kg (CY24), and countries like China (601 kg). Net debt/EBITDA is materially lower versus previous peaks and cash flow generation is strong. Most of the companies are embarking on a multi-year large capex cycle, which at this point looks to be well-funded from organic cash flows, assuming commodity prices hold at current levels.

Drawing on your experience across several market cycles, what advice would you share with young investors who are beginning their investing journey today?
The advice to young investors or even seasoned investors would be to ‘Stay Invested’! Wealth is built through time in the market, not trying to time the market. Use volatility to your advantage. Market corrections are opportunities to accumulate assets, not reasons to panic. Let compounding work for you. Even small, consistent SIPs in diversified equity can outperform speculation over time. Ignore the noise. In an age of finfluencers and information overload, patience and continuous learning are your biggest edge.