Auto Sector to Shine, Banks Healthier: Anil Rego's Market Outlook

• Anil Rego, Founder of Right Horizons PMS, predicts the auto sector will be a star performer this year due to strong demand, operating leverage, and earnings momentum.
• Indian bank balance sheets are in their strongest position in over a decade, with a fundamentally healthier outlook driven by earnings and balance-sheet strength.
• The Union Budget 2026 may focus on labor-intensive industries and job creation, particularly in MSMEs, textiles, leather, and handicrafts.
• Global factors like US actions on Venezuela and Iran, and proposed tariffs, are seen as pressure tactics with limited long-term impact on Indian equity markets.
• GST rate cuts are expected to be a significant pivot for earnings growth from Q3 onwards, leading to improved consumption and corporate margins.

Why It Matters: Anil Rego forecasts a strong year for autos and banks, with global risks contained and GST cuts boosting earnings.