Daily Voice: Probability of earnings downgrades exist in FY26, continue to prefer private financials over IT, says Bandhan AMC's Daylynn Pinto

We will continue to remain in an extremely volatile environment unless clarity emerges on US trade and foreign policy going forward. At this point, there seems to be heightened level of speculation on how the tariff policy works out with various countries and the resultant impact (good or bad) on Indian corporates.

Do you believe the current challenges represent short-term pain for the US economy but long-term gain?

We believe that long term gain almost always is a result of short-term pain that any country/economy needs to undergo, especially when we are talking about such drastic changes in policy.

Which sectors would you consider increasing exposure to in the current market environment?

At the current juncture, we would like to be overweight on sectors which are relatively more insulated to global trade and tariff outcomes namely private financials and consumer staples.

Is now a good time to build a portfolio, considering Warren Buffett’s view that uncertainty is the friend of the long-term value investor?

There is no set perfect time to build a portfolio. While there is uncertainty, we do not believe valuations are reflecting the same (insufficient risk premia). We continue to favour businesses which have robust cash flows (over near term growth) and balance sheet capacity to take advantage of any opportunities that may arise.

Do you expect hopes of a strong earnings recovery in FY26—off a low FY25 base—to gradually fade?

We believe that FY26 earnings continue to remain on the optimistic side given the current global environment amidst an already slowing Indian economy. Probability of earnings downgrades exist in FY26.

Is it better to avoid the IT sector and instead invest in banks?

While we continue to prefer private financials over IT, we believe that large cap IT post the recent correction are now trading at reasonable valuations.

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