A fresh analysis from Antique Stock Broking Limited paints an optimistic picture for Indian stock markets in the coming year. The India Equity Strategy 2026: Earnings redux report, published on 4 January 2026, suggests that domestic equities are poised for a stronger performance, primarily driven by a potential rebound in corporate profitability.
The Pillars of the 2026 Recovery Thesis
After navigating a difficult 2025 characterized by earnings downgrades and foreign portfolio investor (FPI) outflows, the outlook for the calendar year 2026 appears significantly more constructive. The brokerage identifies three core pillars supporting this revival: a recovery in corporate earnings, improving macroeconomic conditions, and a likely resurgence in foreign investor flows into Indian equities.
Antique expects India's favorable economic phase, often termed a "Goldilocks" scenario, to persist. This phase is marked by robust economic growth, manageable inflation levels, and supportive government and monetary policies. The report credits measures already implemented by the Government of India and the Reserve Bank of India (RBI) for this sustained stability.
Earnings Growth and Sectoral Opportunities
The central argument for the 2026 market upswing hinges on corporate earnings. Antique projects that the Nifty earnings per share (EPS) will grow at a compound annual growth rate (CAGR) of 16 per cent over FY26 to FY28. This represents a notable acceleration from the subdued growth witnessed in the recent past.
The analysis notes that corporate earnings typically follow trends in wholesale price inflation and nominal GDP growth. With both these indicators expected to normalise, a supportive environment for profitability across various sectors is anticipated.
From a sectoral perspective, the brokerage highlights a revival in private capital expenditure (capex) as a key investment theme for 2026. Furthermore, financials—including banks, asset management companies, and insurance firms—are predicted to gain from an earnings upcycle, bolstered by domestic macroeconomic stability. Selected discretionary consumption segments and certain mid- and small-cap stocks are also identified as potential focus areas for investors.
Foreign Investment and Market Structure
The Antique report also forecasts a revival in FPI equity inflows during 2026. This expected return is supported by reasonable market valuations compared to other global markets. When combined with steady domestic institutional and retail inflows, these foreign funds could reinforce the earnings-led recovery, helping markets overcome the volatility experienced in 2025.
The report concludes by stating that while Indian equities are in a mature bull market with major indices trading near their 52-week highs, significant sectoral divergence exists, underscoring the importance of stock selection. The anticipated finalisation of bilateral trade agreements with major partners like the United States and the European Union is also highlighted as a key medium-term positive for the economy and markets.
