Mumbai: Kotak Mahindra Mutual Fund just dropped its Annual Market Outlook 2026, and there’s a lot for investors to chew on. They see strong opportunities both in stocks and fixed income over the next year.
Basically, with interest rates starting to cool off and India’s economic fundamentals holding steady, things look set for growth.
Nilesh Shah, the company’s MD, lays it out straight-equity returns in FY26 will ride mainly on how much companies can grow their earnings. He figures India’s top companies can deliver double-digit growth in FY27. He also thinks global investors will keep showing interest and that the smartest move right now is to stay balanced-spread your bets across different assets as the markets shift.
Here are some of the big equity themes for the year:
Financial Services: This sector’s on an upswing. Credit growth is picking up, banks are lending more, and the basics all look solid. The gap between credit and deposit growth is narrowing, so pressure on margins should ease up-and that’s good news for profits. All in all, financial services still look like a solid long-term play.
Consumption: Spending is bouncing back as incomes climb, especially out in the countryside. Rural per-capita income just crossed the USD 2,000 mark, which is a pretty big deal for things like cars and other big-ticket items. Think two-wheelers, cars, and other goods that benefit from tax reforms and low inflation. Sales numbers already show demand is strong-and people are willing to pay more for quality.
E-Commerce: This space is still way under-penetrated in India, but it’s growing fast. By FY30, e-commerce could grab 12-13% of all retail sales, with electronics and beauty products leading the charge. A few big players control most of the market, which lets them scale quickly and push profitability higher as organized retail grows.
Healthcare: The long game here is strong. With more people getting older and chronic diseases on the rise, healthcare spending is only going up. India’s elderly population will double over the next 25 years, so expect steady demand for healthcare services and related industries.
On the fixed income side, bonds are set to add some stability to people’s portfolios. If India makes it into the Bloomberg Global Aggregate Index (we’ll find out by January 2026), that could pull in around USD 25 billion in investment. The fundamentals look good, and the balance between demand and supply means the outlook for bonds is solid.organised retail expansion and higher profitability.