Key Takeaways:
- Motilal Oswal predicts a recovery in Indian equities in 2026 driven by improving corporate earnings and supportive domestic policy.
- The brokerage’s New Year picks include Bharti Airtel, SBI, HCLTech and Eternal, reflecting confidence in financials, consumption and digital themes.
- Analysts expect Nifty earnings growth to rebound to 9% in FY26E and accelerate thereafter, highlighting structural growth drivers.
- Investors will watch domestic triggers such as the Union Budget, RBI policy and FII flows as well as global catalysts including a potential US-India trade settlement — key to the Indian equities 2026 outlook.
Motilal Oswal Wealth Management has forecast a recovery for Indian markets in calendar year 2026, citing a likely improvement in corporate earnings, supportive domestic policies and a revival in private sector investment. The brokerage says these factors, together with any resolution of the tariff dispute with the United States, could act as important catalysts for equities.
Indian equities 2026 outlook and market context
The firm noted that despite global uncertainty in 2025, Nifty50 delivered a double‑digit return of around 10 per cent. Broader market performance has been mixed, with the Nifty MidCap 100 up roughly 5 per cent while the Nifty SmallCap 100 has fallen near 6 per cent. Motilal Oswal remains constructive on India’s long‑term structural story, citing favourable demographics, rising digital adoption and greater financialisation of household savings.
At the core of the forecast is an expectation that corporate earnings will regain momentum. Motilal Oswal projects Nifty earnings growth to bounce to 9 per cent in FY26E, rising further to about 15 per cent in FY27E and FY28E. The brokerage believes ongoing policy initiatives will support the reset in earnings trajectory over the medium term.
Domestically, investors will be watching the Union Budget, government spending plans and Reserve Bank of India policy. Foreign institutional investor flows will also be a key short‑term driver. On the external front, a potential US‑India trade agreement and the path of US interest rates, along with other geopolitical developments, will influence market sentiment.
Investment themes and stock selections
For 2026, Motilal Oswal has identified four themes it believes will outperform: financials (banks, insurance and capital markets), consumption (autos, retail and discretionary), manufacturing (industrial and capital goods) and a combined digital and healthcare theme. The brokerage says e‑commerce and platform businesses offer long‑term compounding opportunities, while improving domestic healthcare demand and export prospects support the case for healthcare names.
On specific names, the brokerage’s New Year stock picks with target prices include Bharti Airtel at 72,365, State Bank of India at 71,100, HCLTech at 72,150 and Eternal at 7410. Other selections span TVS Motor, Max Financial, Biocon, JK Cement, Poonawalla Fincorp and Privi Speciality, reflecting a mix of cyclical recovery and secular growth plays.
Motilal Oswal’s stance is pragmatic rather than unanimous optimism. While the brokerage expects a recovery, it highlights that valuations and the trend in corporate earnings will remain important watchpoints. Investors are advised to consider policy updates and earnings revisions as the year unfolds.
Business Standard’s report includes the brokerage’s view and a reminder that these are independent recommendations. Readers are urged to consult certified financial advisers before making investment decisions.
