Business
ETMarkets Smart Talk| We expect Nifty to be in the range of 28,000-29,000 in coming CY2026, says Vikas Khemani
Speaking to Kshitij Anand of ETMarkets, Vikas Khemani, Founder & CIO of Carnelian Asset Management and Advisors, says he expects the Nifty to trade in the 28,000–29,000 range in CY2026, even as broader markets undergo selective churn.
Khemani explains why returns in the coming year are likely to be driven by disciplined stock picking rather than index momentum, shares his views on sectoral leadership, the role of gold and currency movements, and outlines how investors should position portfolios to navigate a fundamentally driven but selective market environment. Edited Excerpts –
Q) We have hit fresh record highs in November, with a 10% gain so far this year. How are we placed for 2026?
A) Indian equity markets are entering 2026 on a strong footing, supported by recovery in economic growth, improving corporate earnings, liquidity and policy support.
While indices are at record highs, the important point is that the market has already seen a phase of correction in many stocks in the last 18 months and removal of froth to an extent in many pockets.
India continues to stand out globally due to its domestic demand, manufacturing push, and policy stability. India also continues to benefit also from government-led infrastructure spending and a steady push towards manufacturing.
We expect the Nifty to be in the range of 28000-29000 in coming CY2026. Returns will come more from select stocks and sectors. This will be a market where discipline and stock selection matter more than Index momentum.
Q) Gold and silver outperformed by a wide margin in 2025. How will precious metals play out in 2026? Any triggers to watch out for?
A) The strong performance of gold and silver in 2025 was driven by a combination of global uncertainty, geopolitical tensions, currency volatility, and expectations of a change in global interest rate cycles. These factors led investors to seek safety in precious metals.
Looking ahead to 2026, precious metals may not see the same sharp upside, but they will continue to play an important role as a hedge in portfolios.
Gold, in particular, should be viewed as a portfolio stabiliser rather than a primary return driver. Investors should avoid chasing past returns and instead maintain a measured allocation for diversification.
Q) The rupee has crossed 90 against the US dollar. Are we headed towards 100? What is causing the fall?
A) The recent depreciation is largely driven by global factors, particularly the continued strength of the US dollar amid higher US interest rates attracting capital flows.
India’s fundamentals remain strong, with comfortable foreign exchange reserves, a low current account deficit of around 1% compared to 4–5% in the past, and benign inflation.
Crude imports, largely sourced at reasonable prices, are well managed. While import-dependent companies may face some margin pressure and inflation could edge up, these impacts are cyclical rather than structural. A gradual depreciation also supports export competitiveness and may help curb impact of US Tariffs
Q) Which sectors are likely to lead the markets in 2026?
A) We continue to prefer sectors aligned with India’s domestic growth story. Consumer and automobile stocks are likely to benefit from potential tax cuts, improving consumer sentiment, and a gradual recovery in rural demand.
Banks and NBFCs remain well positioned, supported by healthy credit growth, while net interest margins are expected to stabilize over the coming quarters.
Healthcare and CDMO companies continue to offer strong structural growth opportunities as global players diversify supply chains and increase outsourcing.
Additionally, power and capital goods sectors should see sustained momentum, backed by higher investments in infrastructure and manufacturing.
Q) Which themes may have already run up in 2025 and where should investors be cautious?
A) Certain themes performed extremely well in 2025, driven largely by narratives and investor sentiments. Sectors such as defence, railways, EMS, and select infrastructure plays have seen valuations move significantly ahead of their earnings growth.
While these sectors remain structurally important for India’s long-term growth, investors should be cautious at current levels. Future returns may be more moderate, and volatility could increase.
It may be prudent for investors to review allocations and rebalance portfolios, especially where valuations leave little margin for error.
Q) IPO activity has crossed the 100-issue mark, raising nearly ₹2 lakh crore. What are your expectations for 2026?
A) The sharp rise in IPO activity reflects growing confidence in India’s capital markets and the availability of risk capital.
At the same time, history shows that periods of heavy IPO issuance demand greater discipline from investors, as not all listings go on to deliver long-term value.
In 2026, IPO activity is likely to remain healthy, but investor focus should remain firmly on fundamentals. The quality of the business model, visibility and sustainability of earnings, and valuation comfort will be far more important than market sentiment at the time of listing.
Q) What were your biggest learnings from 2025?
A) One of the most important learnings from 2025 was that markets eventually return to fundamentals. While narratives, themes, and momentum can influence stock prices in the short term, earnings growth and valuation discipline ultimately determine long-term outcomes.
Parts of the market that ran ahead of fundamentals also saw sharper corrections, reinforcing the importance of respecting valuations.
Another key takeaway was the value of patience and staying invested through volatility. Periodic corrections and sharp rotations were part of the market journey during the year, but investors who remained focused on quality businesses with strong balance sheets and earnings visibility were better positioned to navigate these phases without making emotional decisions.
Over time, a disciplined and consistent approach continues to be the most reliable way to create wealth.
Q) What will be the key triggers for equity markets in 2026?
A) Equity markets in 2026 will be influenced by a combination of domestic and global factors, but the most critical driver will remain corporate earnings growth.
The ability of companies to deliver consistent earnings and protect margins will ultimately determine market direction.
On the domestic front, progress on India’s manufacturing push, infrastructure spending, and private sector capex will be closely watched, as these will shape medium-term growth visibility.
Policy stability and regulatory continuity will also play an important role in sustaining investor confidence.
Q) How should a 30–40-year-old invest ₹10 lakh in 2026?
A) For investors in the 30–40 age group, the focus should be on long-term wealth creation through a disciplined investing approach in good quality growth companies.
Given their longer investment horizon and ability to withstand short-term volatility, a meaningful allocation to equities is essential. Current market levels are offering investors a good opportunity to accumulate quality growth stocks that still trade at reasonable valuations.
We believe the market could make new highs over the next 6–12 months. Stay invested, increase allocation towards equities systematically where possible, and use volatility as an opportunity.
The key is not to time markets, but to remain focused on asset allocation discipline, periodic rebalancing, and long-term compounding, which have consistently proven to be the most effective drivers of wealth creation over time.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
