 "Nilesh Shah, BFSI")
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The domestic equity market is poised to deliver a better performance in calendar year (CY) 2026 as corporate earnings are expected to return to double-digit growth, Kotak Mutual Fund (MF) said in its equity outlook on Wednesday.
“Equity returns in CY 2026 are likely to be anchored in earnings growth, with India Inc expected to deliver double-digit growth in the coming financial year,” said Nilesh Shah, managing director, Kotak Mahindra AMC. However, he cautioned investors from going overboard on equities amid improving outlook. “Investors are advised to moderate return expectations and adopt a balanced, diversified approach across asset classes to navigate evolving market dynamics,” he added.
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The fund house sees opportunities in sectors and themes like financial services, consumption, ecommerce and healthcare. The financial services sector, it said, is witnessing a pick-up in credit growth. In addition, it sees the narrowing gap between credit and deposit growth easing margin pressures and supporting profitability.
Consumption is set for a strong rebound, aided by rising incomes, GST reforms, and festive demand, while healthcare spending is rising with aging demographics and increasing chronic ailments, Kotak MF said.The asset manager said its view is constructive on fixed income as well, given the favourable demand-supply dynamics and supportive macro fundamentals.
“With evolving market conditions, fixed income is set to play a meaningful role in portfolios by adding stability and helping manage risk. India’s prospects of entering the Bloomberg Global Aggregate Index have also strengthened, with a formal decision expected in January 2026 and potential inflows of around 25 billion dollars,” it said.
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Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd
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