After a subdued year, Indian equities are expected to fare better in 2026, supported by an earnings recovery, improving domestic consumption, and a more stable macroeconomic backdrop.
Expectations for 2026
The year 2025 delivered modest returns for investors, despite strong domestic inflows, tax cuts, and government support. However, 2026 is expected to mark a turning point, driven by a stronger earnings outlook, a recovery in domestic consumption demand, and a more supportive macro environment.
Portfolio Reshuffle
Kotak Equities made several changes to its recommended model portfolio, adding Dixon Technologies with a weight of 150 basis points, citing long-term growth drivers despite recent share-price weakness.
- Dixon Technologies: added with a weight of 150 basis points
- InterGlobe Aviation (IndiGo): weight increased by 50 basis points to 180 basis points
- Aadhar Housing Finance: added with a 150 basis point allocation
Kotak also removed Torrent Pharmaceuticals from the portfolio, trimmed weights on Bharti Airtel and Reliance Industries, and increased its allocation to Mahindra & Mahindra.
Looking Ahead
Kotak expects Nifty-50 net profits to grow 18% in FY2027E and 15% in FY2028E, with diversified financials, metals and mining, oil and gas, and telecommunications services contributing the bulk of incremental profits. However, it cautioned that several pockets of the market remain expensive, underscoring the need for selective positioning.
Remember, this is perspective, not prediction. Do your own research and consider your own investment goals and risk tolerance before making any investment decisions.