Daily Voice | Strong asset quality seen for banks, NBFCs in FY26; IT services a dark horse, AI risks to watch: Manish Gunwani

Manish Gunwani is the Chief Investment Officer – Equity at Bandhan AMC

Manish Gunwani, the Chief Investment Officer – Equity at Bandhan AMC, expects asset quality for banks and NBFCs to be robust in 2026. So, value stocks in this space look attractive, he said in an interview to Moneycontrol.

According to him, IT services can be a dark horse in 2026, given that valuations are cheap on a cash flow basis, the US economy remains resilient, and the threat of AI seems to be priced in largely.

However, one needs to be nimble, and if the impact of AI is more than expected, then a change in view may be warranted, he said.

The best guess is that some reduction is likely in geopolitical tensions. The biggest issue is the Ukraine-Russia conflict and there seems to be some movement towards peace. A lot will depend on how collectively Europe reacts to the initiatives of the US to end the war.

We think this is an interesting space that will expand over time. We are bullish on some stocks with a view that in a 3–5 year timeframe, the strong topline growth will result in margins expanding as operating leverage plays out.

The rupee has had a tough time in 2025, underperforming many emerging market currencies. With a reasonably healthy current account and inflation, we do think there are bright chances of it having a much better year ahead.

We do expect asset quality for banks/NBFCs to be robust, so value stocks in this space look attractive.

We like selective technology platforms and insurance stocks. Real estate has not performed in 2025, and valuations look interesting there as well.

Yes, it can be a dark horse, given that valuations are cheap on a cash flow basis, the US economy remains resilient, and the threat of AI seems to be priced in largely. However, one needs to be nimble, and if the impact of AI is more than expected, then a change in view may be warranted.

Our base case is that in the near future, there will be a trade agreement with the USA, which will substantially bring down tariffs for India from the current level. The exact timeframe for this and at what level the tariff rate settles is clearly difficult to guess.

Key challenges are 1) globally long-term bond yields are sticky and have not responded to a reduction in short term interest rates, 2) the impact of AI on jobs in India, 3) capital outflows from India via selling by foreign investors, andan increase in gold/silver purchases by Indian households can impact currency and liquidity.

Triggers can be the US-India agreement, weakening of the dollar, given interest rate cuts are likely in the USA, further monetary easing by the RBI, etc.

We do think there is a good chance that mid/smallcaps will do better vs largecaps in the medium term…next 1-2 quarters could still be a challenge given the healthy supply of paper lined up.