In an interview with Moneycontrol, Dinshaw Irani, MD & CEO of Helios India, said, “We have no doubt that FIIs will return in 2026 since the reasons for selling are now reversing.”
He claims that the growth rates have returned and the values are again acceptable. According to him, even the primary causes—the results of the trade agreement with the US and a confirmation of growth sustainability—should be resolved by Q1CY26.
The domestic consumer demand-related industries, in his opinion, are the most likely to do well. In order to meet the increasing domestic demand, one may even play the capex and infrastructure theme selectively, he noted.
Do you believe that in 2026, the next Fed Chair will likely drive rates down more forcefully?
On May 15, 2026, Jerome Powell, the current Federal Reserve chairman, will step down. The President of the United States will appoint a new Chairman, and he has said publicly that he will announce the nominee at the start of 2026. The US betting counters are favoring his reliable economic adviser, Kevin Hassett, for nomination.
It will then be necessary for the Senate to ratify this appointment. The President has already voted for significant rate cuts and temporarily appointed Stephen Miran, one of his counselors, to the Fed Board. Hassett would follow suit if he were to take over as chair.
Do you think next year’s profit increase will be more widespread or more selective?
Beginning in the first quarter of FY25 and continuing into the first quarter of FY26, there was a noticeable slowdown in profits growth. The previous year’s fiscal and monetary tightening, which has been successful in containing inflation, was the cause of the downturn.
However, the monetary and fiscal easing that started in the latter quarter of CY24 has also been quite successful in increasing consumption. Therefore, we think that domestic consumption-driven industries have the potential to do far better than export-driven businesses.
What’s Holding FIIs Back from India Now, and Will They Return in 2026?
FIIs moved money out of the nation only because their lofty valuations were not backed by sufficient earnings growth. With the exception of a few months, there have only been outflows since the FII flight began in September of last year due to the decline in profits growth.
But today, the motivations for selling are changing. The growth rates have returned, and the values are now acceptable. The conclusion of the trade agreement with the US and a confirmation of growth durability are, in our opinion, the primary reasons they have refrained from going on the shopping frenzy. It is anticipated that Q1CY26 will address both of these issues. We are certain that they will make a comeback in 2026.
Which industry topics are most important for the next year?
The domestic consumption and demand-related industries, in our opinion, have the highest chance of succeeding. Thankfully, India has a wide range of these industries, including banking, financial services and insurance, automobiles and related businesses, hospitality, healthcare, e-commerce and quick commerce, platform companies, etc.
In order to meet the increasing domestic demand, one may even selectively play the topic of infrastructure and capital expenditures.
Will Inflation Ease in 2026 and Will RBI Cut Rates Next Year?
The demand for goods and services will inevitably increase given the sharp rate reduction and the massive influx of cash. Because supply cannot keep up with demand, this will undoubtedly lead to demand-led inflation in the future.
By the end of CY26, which corresponds with a low YoY basis, we anticipate that this scenario will materialize. However, as inflation is anticipated to stay low throughout that time, the RBI should be able to lower rates far into the first part of CY26.
Do you think there will still be a high demand for precious metals in 2026?
The ongoing strength of precious metal prices has perplexed us. The previous causes of the strength, such as growing inflation, political and trade unpredictability, and geopolitical concerns, were well known. However, these forces are now lessening.
The USD’s decline in value relative to other currencies and human greed are now the main factors sustaining the surge. We have no solutions for the latter, but the former will naturally ease out.
Quick Commerce: Long-Term Potential, Short-Term Consolidation Likely
Although we dislike the rapid commerce area, we like it since it is predicted to develop exponentially in the near future due to underpenetration. In businesses with such rapid development, new, well-funded companies will inevitably test the waters, and because there will inevitably be failures, consolidation is the only viable option. Heavy discounting cannot be the solution since it would simply guarantee an early crash and burn. Established players are assumed to have an innate advantage.
