Indian stock markets may see double-digit gains in 2026: Riddhiman Jain

With earnings expected to revive and valuations becoming more reasonable, the groundwork for the next upcycle is in place, said Riddhiman Jain of Waterfield Advisors

With just 8 per cent returns at the benchmark level, calendar year 2025 has turned out to be a 'reset year; for stock markets, said Riddhiman Jain, Managing Director and Head of Investment Strategy and Solutions, Waterfield Advisors. In an email interview with Nikita Vashisht, Jain said the markets, now, stand on a "studier" base with groundwork done for the next upcycle. Edited Excerpts:

How would you assess 2025 for stock markets and what is your outlook for Indian equities in 2026?

The consolidation phase through 2025 is increasingly being seen as a constructive breather rather than a setback. Markets have used this period to digest valuations and reset expectations, creating a sturdier base. With earnings expected to revive and valuations becoming more reasonable, the groundwork for the next upcycle is in place. Looking ahead to 2026, forecasts point to a strong rebound in corporate profitability, positioning Indian equities for a potentially upbeat year, one that could deliver healthy, double-digit returns if the earnings traction materialises.

Indian markets are trading at a discount to the US markets — the widest in 17 years. What could make the markets get their mojo back?

A broader earnings recovery and delivery on India's growth narrative will be critical for sentiment to turn. Corporate balance sheets are in their best shape in years, and the capex cycle is gradually strengthening, providing both downside protection and lending momentum to banks. After a year of consolidation, valuations have normalised to more palatable levels. Together, these elements set the stage for flows to re-enter and for markets to regain their rhythm as confidence builds.

Following India Inc's Q2 results, which sectors do you see driving earnings growth in 2026? Any sectors that warrant caution?

The earnings thrust in 2026 is likely to come from segments already showing clear momentum—mid-tier technology firms, gold financiers, life insurers, travel and hospitality players, non-ferrous metals, and CDMO-led pharma businesses. Housing finance and select financials should continue to post steady numbers as well. On the flip side, traditional IT services may warrant caution, with growth visibility still muted and demand recovery yet to convincingly materialise  ALSO READ | Midcaps shine in Q2 as cycle bottoms, says Motilal Oswal; OMCs, Metals lead

How have HNIs, FIIs, and family offices' views on India evolved over the past year? Has this influenced their asset allocation strategies?

Over the past year, most investors haven’t viewed India through a negative lens—especially when seen against the backdrop of the strong five-year return profile. For global allocators who think in terms of relative value, the contrast with China has become more pronounced, prompting FIIs to reassess their positioning after several years of underperformance in emerging markets.

 

At the same time, domestic HNIs and family offices have continued to deepen and diversify their allocations. The increased interest in gold, silver, REITs, InvITs, and performing credit reflects a more mature and sophisticated approach to asset allocation. Rather than chasing momentum, investors are now making more deliberate tilts across asset classes to balance growth, income, and stability.

What has your investment guide been for global and Indian investors this year?

Our guidance this year has centred on disciplined, multi-asset allocation. For most investors, this has translated into high-single-digit allocations to REITs and InvITs, around 20 per cent of deployed into Private equity and private debt/ credit, and another high-single-digit exposure to gold and silver. Within equities, we’ve emphasised the importance of active management, given that the era of broad-based rallies appears to be behind us.

 

We've also encouraged clients to diversify meaningfully into global markets, which have outperformed this year. As a result, despite a relatively subdued equity environment in India, overall portfolio outcomes have been strong—driven by careful manager selection and a more sophisticated spread across asset classes.

What has been Waterfield Advisors' strategy to scale its corporate and institutional advisory business amid global volatility?

In a year marked by global volatility, our approach has been to deepen our engagement with corporates, institutions and large family offices by offering end-to-end treasury management, advising on the setup and professionalisation of family office structures, and guiding them across their investment needs. The focus has been on building long-term, solutions-driven relationships—helping clients navigate liquidity, governance, and asset allocation with a more institutional framework.

What are Waterfield Advisors' three key focus areas for its next phase of growth in the wealth management industry?

 

As the only pure advisory platform in the country, we are doubling down on high-quality, conflict-free advice. This includes strengthening our product and research capabilities and continuing to educate clients on suitability, asset allocation and long-term discipline. Advice, rather than distribution, remains the centrepiece of our strategy.

 

That apart, by working exclusively for investors and charging only investors, we remain fully aligned with them. This allows us to negotiate better pricing, structures and solutions entirely on the client's behalf, with no distributor incentives or embedded conflicts influencing decisions.

 

We are also expanding access through institutional-grade opportunities and technology. We are scaling the platform to pool capital and unlock institutional-quality deals, funds and structures that were traditionally inaccessible to individual investors or standalone family offices. Alongside this, technology is becoming a critical enabler - providing clients with round-the-clock access to information, real-time portfolio visibility, seamless reporting and on-demand research. This combination of enhanced access and stronger digital infrastructure ensures clients can participate in superior opportunities with greater transparency, speed and confidence.