Capturing India’s Next Growth Phase
Sectoral Themes and New Year Picks 2026
Our New Year Picks 2026 are therefore structured to identify companies and sectors best positioned to compound earnings over the next market cycle, leverage domestic growth drivers, and exhibit strong balance sheets and pricing power amid a volatile global environment. While near-term volatility, particularly around currency movements and foreign flows, remains a reality, structural demand drivers and improving earnings visibility create a constructive backdrop for equity investing. The 2026 investment landscape is expected to reward quality, earnings visibility, and focused sectoral plays aligned with key macro themes. We are building in a Nifty base-case target of 28,100 for Dec’26, valuing the index at 20x Dec’27 earnings.
The year 2026 is expected to be more constructive for Indian equities, transitioning from a period of valuation-led consolidation to an earnings-led market. The favourable domestic macro drivers, combined with policy support and the anticipated resolution of US tariff issues, create a compelling investment case. We also suggest a “Buy on Dips” strategy in the stocks listed below, with an investment horizon of over 12 months.
In this backdrop, we present 5 golden themes for the year 2026:
1. Financials, which would be beneficiaries of credit expansion and the interest rate cycle
2. Playing a domestic growth story through companies benefiting from consumption
3. Selective cyclicals, which are expected to capture the commodity super cycle.
4. Healthcare as a defensive play
5. Aligning and capturing all three segments of the market: Large, Mid, and Small cap
Our New Year picks for 2026 are: State Bank Of India Ltd, Varun Beverages Ltd, Hindalco Industries Ltd, Nippon Life India Asset Management Ltd, Dalmia Bharat Ltd, Astral Ltd, Affle 3i Ltd., Healthcare Global Enterprises Ltd, Mold-Tek Packaging Ltd.
