The December-quarter earnings will be critical to sustaining the market rally, said Dhiraj Agarwal, Managing Director, Ambit Investment Managers, in a conversation with CNBC-TV18. He believes festive demand has been strong and will likely reflect in improved numbers ahead.

Agarwal said that so far, earnings from banks and non-banking financial companies (NBFCs) have been largely in line with expectations, with no big surprises on either side.

He remains “meaningfully overweight” on financials, expecting credit growth to strengthen further as consumer demand sustains.

“Indian financials are a lot more linked to consumer demand than capex demand. If the consumption momentum continues, credit growth can pick up by about 200 basis points,” he said.

Agarwal is comfortable allocating up to

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