Ambareesh Baliga sees muted Q2 earnings; bets on consumption, railways, speciality chemicals

Market expert Ambareesh Baliga expects the ongoing earnings (Q2 FY26) season to remain subdued, with limited upside in the near term. "I don't have too much expectation from these earnings. Overall, we should see some sort of uptick from the December quarter results, which is Q3. That's when markets could touch new highs or move beyond," Baliga told Business Today on Monday.

Baliga believes the consumption theme will continue to hold promise, aided by GST-related benefits. "For the time being, I would say consumption is the story to be looked at because of GST. This is one space that is getting benefited. In consumption, FMCG, white goods and automobiles are the three segments to be focused on," he said.

The market veteran also sees opportunities emerging in the railway sector after a period of correction. "Railways is another space I've started looking at again. We had seen an extremely good move earlier, followed by a decent correction due to execution issues. But now those issues seem to have been largely sorted out, so railway stocks look attractive again," he noted.

Baliga remains optimistic about the speciality chemicals segment, citing global trade dynamics as a potential tailwind. "The third, which has been my favourite for the last 15 months but hasn't done too well, is the speciality chemical space. I expect it to start performing better, especially given the way the US is behaving with China. This sector should get a decent boost because of these developments," he added.

According to Baliga, while short-term performance may stay muted, these themes -- consumption, railways and speciality chemicals -- offer promising opportunities heading into the next quarter.