Watch the Strait of Hormuz as closely as you watch earnings: Uttam Kumar Srimal

India's earnings season is off to a reassuringly steady start. Of the 21 Nifty 50 companies that have reported so far, most have either met or beaten consensus estimates, a signal that corporate India is holding its ground despite the turbulent macro backdrop.

That is the view of Uttam Kumar Srimal, Deputy Head of Fundamental Research at Axis Securities, who gave ET Now a detailed reading of where earnings stand, and where the real danger lurks.

Who delivered, who disappointed

On the bright side of the ledger:

Nestle ✓

Varun Beverages ✓
HUL ✓
Eternal ✓
Banks (select) ✓

Consumption names dominated the outperformers. HUL not only delivered solid numbers but also guided positively for the road ahead, a welcome sign for an FMCG sector that has faced volume pressure. Varun Beverages and Nestle both reported strong results, reinforcing the resilience of consumer staples.

The disappointments were concentrated in two pockets:

Maruti Suzuki ✗
IT Sector ✗

Maruti's numbers missed expectations, weighing on the broader auto pack. IT results were similarly weak, and critically, the guidance offered by tech companies failed to impress the Street, triggering sharp corrections in those stocks.

The crude oil wildcard

"If crude remains elevated for a sufficient period, there will be earnings cuts, not just in Q4 but in Q2 of the next fiscal as well." says Srimal.

With Brent crude hovering above $120 a barrel, Srimal estimates a potential earnings cut of 1% to 3% for Nifty companies in FY27 if prices stay elevated. He acknowledges the situation is still evolving, most managements have already raised output prices to cushion the blow, but warns that a prolonged crude shock will be difficult to fully absorb.

Sectors particularly exposed include paint companies, logistics players, aviation, and any business with high energy or raw material intensity.

What's the next big trigger for markets?

Watch #1

Strait of Hormuz
A resolution between Iran and the US, and reopening of this critical shipping lane, would be the single biggest market catalyst right now.

Watch #2

Earnings season
29 more Nifty companies remain to report. Metals are expected to be the standout sector. Broad beats could restore momentum.

Watch #3

Valuation comfort
At 17–18x forward earnings, the Nifty has already de-rated sharply from 21–22x, building in a meaningful margin of safety.

Watch #4

Metal sector earnings
Srimal expects metals to report the strongest earnings growth of any Nifty sector this season, a potential bright spot for bulls.

Markets have been stuck in a rangebound holding pattern, and Srimal's diagnosis is clear: global uncertainty, not domestic fundamentals, is the primary anchor dragging on sentiment. The good news is that the valuation reset has already happened. The Nifty now trades at a meaningful discount to where it was at the peak, which gives room for a sharp re-rating once the geopolitical fog lifts.

The bottom line: The Strait of Hormuz matters as much as any earnings report right now. A diplomatic breakthrough between Iran and the US could unlock the market's next leg up far faster than any quarterly number. Until then, accumulate selectively; consumption, metals, and well-run banks offer the best risk-reward in an uncertain tape.