India's Stock Market Set to Soar: Kotak Securities Predicts 24% Jump in Nifty 50

Indian Stock Market Outlook 2026

According to Kotak Securities, the Indian stock market is expected to rise in 2026, with the Nifty 50 index possibly jumping up to 24% to reach 32,032 by the end of the year. This prediction is based on a strengthened earnings outlook and resolute government action.

Base Case Scenario

In its base case scenario, Kotak Securities expects the Nifty 50 to rise 13% from its previous closing level of 25,758 to reach 29,120 by December 2026. The brokerage firm has listed several reasons why it has a favorable view of the Indian markets.

Reasons for Optimism

• Improved Earnings Outlook: Kotak Securities believes that its earlier concerns about high valuations and the risk of earnings downgrades have already played out, reducing downside risks and improving the overall market setup.
• Strong Domestic Fundamentals: The Indian markets have largely remained flat over the past 12-15 months, but domestic investor sentiment is likely to play a crucial role in determining the market's direction going forward.
• Government Support: The government's measures to increase disposable incomes, reduce tax burdens, and support job creation are expected to serve as a direct stimulus to domestic demand.

Preferred Sectors

Kotak Securities' preferred sectors include BFSI (Banking, Financial Services, and Insurance), Information Technology, Healthcare, and Hospitality.

Forecasted Growth

The brokerage firm expects a moderate pickup in earnings in FY26E, but anticipates a strong recovery in the net profits of the Nifty 50 index constituents in FY27E, supported by improving fundamentals and a relatively improving macro backdrop.

Nifty-50 Index net profits are expected to grow by 6.6% in FY25, 8.2% in FY26E, and 17.6% in FY27E.

Investment Strategy

Kotak Securities advises long-term investors to focus on quality stocks and add to their portfolios on dips, while being aware of potential risks such as geopolitical tensions, trade protectionism, and currency fluctuations.