Samvat 2082: Investors likely to see up to 15% returns from equities

Pickup in earnings growth and sustained foreign flows hold key

After a year of modest returns, equity investors may anticipate gains of 10-15 per cent in Samvat 2082, which began on Tuesday. 

Although valuations have moderated from their peaks a year earlier, they remain above long-term averages, potentially limiting sharp upsides. Analysts say the trajectory of corporate earnings, economic growth, and the pace of foreign portfolio inflows will be key factors shaping market performance over the coming year. 

In Samvat 2081, benchmark indices paused after two strong years, with the Nifty and Sensex recording modest gains of 6.8 per cent and 5.8 per cent, respectively. The broader Nifty Midcap 100 managed a 5.8 per cent rise, while the Nifty Smallcap 100 declined 2.1 per cent, following consecutive rallies of over 30 per cent in Samvats 2079 and 2080. 

Muted earnings growth, headwinds from US trade policies — such as higher tariffs on Indian exports and steep visa fees — along with persistent FPI outflows to more attractive markets like China, dragged domestic market performance during the year. 

In a recent note, Nomura said it expects the cyclical slowdown in earnings to persist in the near term, with a modest recovery likely in  financial year 2027 (FY27) (April 2026 onwards). The brokerage has set a March 2026 target of 26,140 for the Nifty 50, based on 21 times FY27 estimated earnings per share (EPS) of ₹1,245. 

Analysts believe the central government’s tax reforms and GST rationalisation, coupled with the Reserve Bank of India’s rate cuts and credit-boosting measures, could support equity market prospects. However, the benefits may be offset by subdued household sentiment, sluggish job and wage growth, and weak savings. 

Private capital expenditure continues to be a key missing link. Pramod Gubbi, co-founder of Marcellus Investment Managers, emphasised that sustained earnings recovery hinges on a revival in private investments. 

“A fresh cycle of spending is beginning. The GST and income tax rate cuts are giving consumers an extra cushion to spend. However, parts that were fuelled by public capex are slowing because the government is pursuing fiscal consolidation. What needs to be seen is whether this recovery in consumption also triggers private sector capex, which has been elusive,” Gubbi said. 

Experts caution that without private capex, a broad-based and durable recovery may remain constrained. Valuations, while not inexpensive, have turned relatively fair after an extended period of elevated levels. 

“I am relatively bullish about next year. We will likely get low double-digit returns, driven by earnings rebound, which I expect to grow by around 14 per cent. Valuations are not cheap; they have just become reasonable after being expensive at the beginning of the year. Markets are at the top end of the fair-value zone, and that’s why returns may be lower than earnings,” said Jyotivardhan Jaipuria, founder and managing director of Valentis Advisors. 

During the previous Samvat year, financials and auto stocks outperformed, while IT, energy, and realty trailed. Analysts expect stock and sector selection to remain the key differentiator in Samvat 2082. They believe banking, pharmaceuticals, and cement are well-positioned for potential outperformance. 

“We are expecting an earnings rebound in the banking sector. Rate declines tend to compress margins, but that pressure can reverse. Tariff fears on generic drugs have faded, which bodes well for Indian pharma. Cement consolidation has occurred, and pricing is finally moving up after a two-year lull,” added Jaipuria. 

Experts also advise investors to set realistic return expectations and avoid chasing overheated themes. 

“Keep expectations modest. Post pandemic, extraordinary returns are unlikely to repeat. Don’t chase crowded themes; there’s a risk of FOMO in silver and gold,” advised Jimeet Modi, group CEO of Samco.