HT Bureau
GUWAHATI, Dec 3: Kotak Mahindra Asset Management Company Ltd (KMAMC), popularly known as Kotak Mutual Fund, on Wednesday released its Market Outlook 2026, presenting a detailed assessment of India’s macroeconomic landscape and the investment themes expected to guide financial markets in the coming year.
The report identifies opportunities across equities, fixed income, and key thematic sectors, while outlining global and domestic trends that investors should monitor closely.
Nilesh Shah, managing director of Kotak Mahindra AMC, said, “Equity returns in FY2026 are likely to be anchored in earnings growth, with India Inc expected to deliver double-digit growth in FY27. This strength is likely to attract foreign portfolio investors, supporting market liquidity. Midcaps are poised to outperform large and small caps, though the margin of outperformance may remain narrow. Gold and silver should continue to see upside, aided by sustained central bank buying. Investors are advised to moderate return expectations and adopt a balanced, diversified approach across asset classes to navigate evolving market dynamics.”
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The report states that consumption is set for a strong rebound, supported by rising incomes, GST reforms and festive demand.
Rural income per capita has now crossed the USD 2,000 mark, an inflection point that typically drives higher discretionary spending and benefits sectors such as automobiles.
With India remaining among the least penetrated markets globally for two-wheelers and passenger vehicles, rising aspirations, GST relief, benign inflation and rural recovery are expected to boost demand.
A pickup in credit growth, reflected in the rising credit-to-deposit ratio, further signals improving lending momentum.
India’s e-commerce sector is also poised for significant expansion, driven by low penetration and increasing digital adoption.
Overall penetration is projected to rise to 12–13% by FY30, led by categories such as electronics and beauty & personal care.
Meanwhile, healthcare spending continues to climb due to aging demographics and a rise in chronic illnesses, with India’s elderly population among the largest globally and expected to double over the next 25 years.
In fixed income, evolving market conditions are expected to strengthen the asset class’s role in providing portfolio stability and risk mitigation.
India’s prospects of inclusion in the Bloomberg Global Aggregate Index have improved, with a formal decision anticipated in January 2026 and potential inflows estimated at around USD 25 billion. Supportive macroeconomic fundamentals and balanced demand–supply dynamics provide a constructive outlook for the bond market.
