Markets March On

Dalal Street has remained resilient despite global trade turbulence, but the next leg of the rally will likely be led by select stocks

- BY RAHUL OBEROI

GEOPOLITICAL TENSIONS, THE exit of foreign investors, muted earnings, and the uncertainty over US President Donald Trump's trade policies kept markets and India Inc on tenterhooks this past year. Yet, on Dalal Street resilience shone through.

Forty-five of the 50 companies that make up the NSE Nifty50 index brushed off the volatility, posting gains in their one-year average market capitalisation. The benchmark index's average market valuation rose nearly 16% year-on-year (YoY) to around ₹195 lakh crore as of June 30, from ₹168 lakh crore a year earlier.

Analysts believe this forward march could continue, though at a more modest pace.

“Earnings growth and re-rating of valuation multiples are the two key drivers of growth in market capitalisation,” says Sandip Bansal, Deputy CIO, ASK Investment Managers. At present, the market is trading at about 21 times price-to-earnings (P/E) multiple on one-year forward earnings, in line with the 10-year average.

It is reasonable to expect markets to grow in line with earnings, which are likely to rise in the low double digits, Bansal says. “The key concern is earnings growth,” he adds.

Retail firm Trent, part of the Tata group, was at the head of the Nifty pack with its one-year average market cap surging 96.24% to ₹2.18 lakh crore, as on June 30. After a 4% rise in consolidated profit after tax (PAT) in FY25 to ₹1,534 crore, Trent reported a robust 23.8% growth in PAT in Q1FY26 to ₹415 crore.

According to Motilal Oswal Financial Services, Trent is making a push in Tier-II and III cities with significant long-term potential, although revenues in these markets may differ from mature metro locations.