Daijiworld Media Network - Mumbai

Mumbai, Jul 23: As the Indian stock market navigates through the quarterly earnings season, investor focus remains on select outperformers, with new-age tech companies, private banks, and pharmaceutical majors emerging as key drivers.

On Tuesday, Deepinder Goyal-led Eternal surged 15% following robust Q1 results, sparking a 4% gain in Info Edge as well. The upbeat sentiment in select counters provided a cushion amid cautious overall trade, analysts said.

Market expert Abhay Agarwal, managing director of Piper Serica Advisors, told NDTV Profit that the first quarter earnings are crucial for justifying current premium market valuations. He believes that smaller companies, especially in the digital and consumer internet space, will outperform their larger counterparts.

"New-age tech companies like Eternal, Paytm, Swiggy, and CarTrade are not just chasing profits but are actively creating markets. These companies are a great play on India’s consumer growth story," said Agarwal, adding that he is going overweight on the segment due to their scalability and operating leverage.

On banking, Agarwal is bullish and prefers private sector players over public banks. "Private banks focus on shareholder value and are likely to benefit more from positive earnings surprises," he said, adding that Q2 FY26 could be even stronger for the banking sector.

He also remains firmly positive on the pharma sector, particularly large generic exporters and innovators like Dr. Reddy’s Labs, Lupin, and Cipla. "The US FDA is supportive, and the pipeline looks promising. CDMOs and innovators are where the real action lies," he noted.

Agarwal concluded that the pharma sector, which was an outperformer last year, is likely to retain that momentum this year and into the next.

Meanwhile, foreign investor profit-booking continues to exert downward pressure, but steady domestic inflows and expectations from the India-US trade deal are lending a positive bias to the market, analysts said.