October Strategy – Test of Earnings Resilience: October should mark a transition from macro- driven volatility towards earnings-driven stock selection. September’s correction has materially changed the risk-reward equation, but it has not fundamentally altered India’s medium-term growth framework. The domestic economy continues to expand at a healthy pace, the capex cycle remains intact and corporate balance sheets are comparatively strong. However, the external environment has become more challenging, with West Asia, crude oil, US yields, currency volatility and foreign selling creating a meaningful near-term risk premium. October is therefore likely to be an important earnings-validation month. The market will increasingly distinguish between companies that can sustain growth and margins despite higher costs and those vulnerable to demand or profitability pressure. For investors, the focus should consequently remain on 12–18 month earnings visibility, management commentary, balance-sheet quality and valuation discipline, while recognising that near-term volatility may remain elevated until there is greater clarity on oil prices, geopolitics and global bond yields. We remain constructive on Indian equities from a medium- to long-term perspective.
Based on the above themes, we recommend the following stocks: Kotak Bank, Bajaj Finance, Bharti Airtel, ICICI Bank, Varun Beverages Ltd, APL Apollo Tubes, HCG Ltd, LG Electronics (I) Ltd, Nestle India Ltd, Eternal Ltd, Chalet Hotels, Minda Corporation Ltd, Dalmia Bharat Ltd, City Union Bank, CCL Products.
