‘Follow the earnings trail for your equity strategy’: Hussain Selani

Investors Advised to Shift Focus to Earnings-Led Equity Strategy

Hussain Selani, head of investments for India and Global Indians, Barclays Private Bank, suggests that investors adopt a constructive, earnings-led equity strategy in 2026. This involves selectively increasing exposure to sectors where earnings visibility is improving, rather than relying on broad market beta.

Key Equity Investing Strategy for 2026

• Focus on earnings upgrades: With GDP tracking around 6.5% and spare capacity being absorbed without reigniting inflation, India's medium-term growth remains resilient.
• Earnings-led growth expected: 12-month forward EPS is expected to grow by about 14% through CY26, driven by domestic demand and strong local investor participation.
• India stands out as a relative growth compounder: Resilient domestic demand and strong local investor participation make India a prime location for steady, earnings-driven returns.

Select Sectors to Capitalize On

Investors should selectively increase exposure to sectors where earnings visibility is improving and revisions have bottomed out, rather than relying on broad market beta. Sectors such as:

• Financials, supported by accelerating credit growth and healthy balance sheets.
• Industrials, benefiting from strong order books and cleaner cash flows.
• Automobile, gaining from lower rates and GST changes.
• Telecom, enjoying stable pricing power.
• Real estate and building materials, continuing to benefit from structural demand and improving funding conditions.

Gold and Silver as a Safe-Haven Asset

Gold delivered a standout year in 2025, rising over 60% and reaching multiple all-time highs, supported by geopolitical tensions, a softer dollar, and central-bank accumulation. Silver, which gained nearly 160%, offers higher sensitivity to global capex cycles and monetary volatility.

Why Gold and Silver are Essential in Investment Portfolio

• Provide a cushion against drawdowns: Precious metals offer a stable store of value during market volatility.
• Currency weakness and market shocks protection: Gold and silver provide a safe-haven asset during times of uncertainty.

Fixed Income Outlook for 2026

The outlook for fixed income in 2026 is constructive, favouring carry-focused, high-quality portfolios over aggressive duration strategies. Investors should lean toward high-quality, medium-duration portfolios that benefit from spread compression without taking excessive rate risk.

Key Opportunity in Debt Market

• Select AAA and AA opportunities remain attractive: Corporate balance sheets are in solid position, making these opportunities ideal.
• Duration should be added tactically: During yield spikes, it's essential to add duration strategically to maximize returns.