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Midcap, Smallcap Companies Set for Strong Earnings, Consumer Sector to Shine
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CNBC TV18•29-09-2026, 13:19
Midcap, Smallcap Companies Set for Strong Earnings, Consumer Sector to Shine
- •Enigma Investment Partners CIO Viraj Mehta expects strong Q2FY27 earnings for small and mid-cap companies, avoiding IT and US-exposed stocks.
- •Mehta notes positive underlying business trajectory despite one-off inventory gains in Q1FY27 for chemical and pharmaceutical firms.
- •Enigma maintains a bottom-up portfolio strategy, bullish on consumer names due to inflation-driven revenue growth and margin expansion.
- •Inflation for consumer companies could reach high single digits or early double digits, leading to significant revenue growth with modest volume increases.
- •Mehta is avoiding companies with heavy US exposure due to uncertainties, but remains bullish on domestic themes like capital expenditure-driven pipe companies.
Key Questions Answered
According to Enigma Investment Partners, the July-September quarter of 2026 (Q2FY27) earnings are expected to remain strong for small and mid-cap companies, driven by decent volume growth and continued margin improvement.
Enigma Investment is avoiding the information technology sector and stocks with heavy United States exposure due to uncertainties surrounding tariffs, freight rates, and the broader American economy, though it makes an exception for pharmaceuticals.
Enigma Investment predicts that inflation will drive automatic revenue growth for consumer companies, estimating inflation could reach high single digits or early double digits, turning a 5 to 7 percent volume growth into early to mid-teens revenue growth.
