Indian Equities Set for 2026 Earnings Boom: A Revival in Sight

After a challenging 2025 marked by earnings downgrades and foreign portfolio investor (FPI) outflows, the outlook for calendar year 2026 appears more constructive, it noted.

Antique expects India's "Goldilocks" phase, characterised by robust growth, moderate inflation and supportive policy, to continue, aided by measures already undertaken by the government and the Reserve Bank of India.

The brokerage also highlights the expected finalisation of bilateral trade agreements with the US and the European Union as a key positive for the medium-term economic and market outlook.

"CY26 may turn out to be a better year for the broader Indian markets as corporate earnings and FPI flows may make a comeback (key pain points in CY25). India's 'Goldilocks' phase is likely to continue in CY26 given the right policy intervention already undertaken by the Government and RBI along with the expected finalisation of bilateral trade agreement with the US and EU in the near term," the report read.Earnings growth is central to the 2026 market thesis.

Antique projects Nifty earnings per share (EPS) to grow at a compound annual growth rate of 16 per cent over FY26-FY28, a marked improvement from the subdued earnings growth recorded in the preceding period.

The brokerage also notes that corporate earnings tend to track wholesale price inflation and nominal GDP growth, both of which are expected to normalise, creating a supportive backdrop for profitability across sectors.

Sectorally, the brokerage expects a revival in private capital expenditure to emerge as a key investment theme in 2026. Financials, particularly banks, asset management companies and insurance firms, are also expected to benefit from an earnings upcycle supported by domestic macro stability.

In addition, Antique identifies select discretionary consumption segments, along with some chosen mid- and small-cap stocks, as areas likely to be in focus for investors.

The Antique report also anticipates a revival in FPI equity inflows in 2026, supported by, among others, reasonable valuations relative to other markets. Alongside steady domestic inflows, these factors could reinforce an earnings-led recovery in Indian equities in 2026 following the volatility seen in the previous year, it reiterated.

"Indian equities are in a mature bull market with overall indices trading near their 52-week high, however, sharp sectoral divergence exist," Antique noted.

- ANI