He said the past two years of muted market returns have brought greater discipline to asset allocation, while the latest earnings season is showing signs of a revival.
“Market rewards growth, market rewards earning,” Guha said, pointing to the need for portfolios to reflect where earnings are improving. He said Nifty earnings growth is close to 15%, compared with around 20% for mid-caps and 30% for small-caps.
Guha, however, does not suggest treating entire sectors as a single investment opportunity. Within financials, he prefers non-banks, while in consumption he favours discretionary businesses. In industrials, he sees opportunities in new-age companies and power generation. The focus, he said, should be on identifying specific businesses where earnings are stronger.
This approach is also consistent with Motilal Oswal Private Wealth’s broader 2026 strategy, which has increasingly favoured selective mid- and small-cap exposure as valuations and earnings improve.
Beyond equities, Guha sees a broader role for alternative investments in high net-worth individual (HNI) portfolios. Private credit and higher-yield products are attracting interest from investors looking for additional yield and cash flows, although he stressed that suitability depends on the investor’s risk profile.
Alternatives such as private equity, Private Investment in Public Equity (PIPE) funds and venture capital are also becoming more strategic rather than niche allocations, particularly as family offices become more formalised and investors gain a better understanding of the risks involved.
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Exchange-traded funds (ETFs), meanwhile, have a role to play in the core part of portfolios because they are liquid, easy to access and relatively low-cost. Guha sees them as useful for a top-down allocation, while alternatives can complement bottom-up portfolio construction.
On IT, Guha remains cautious. He prefers new-age and mid-cap technology companies but believes traditional IT services need to demonstrate how they can adapt to an artificial intelligence (AI) led environment. For now, he sees the sector as more of a wait-and-watch opportunity.
“Markets are, whatever, slaves to earnings,” Guha said, stressing that an earnings revival will be key to determining the next phase of performance.
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