Budget 2026: No Big Stimulus, Focus on Governance Reforms, Says Kotak's Pratik Gupta

• Pratik Gupta of Kotak Institutional Equities expects Budget 2026 to prioritize governance reforms over large fiscal stimulus due to limited government fiscal room.
• Key reforms may include deregulation, duty structure adjustments, and measures to boost exports and capital inflows, aiming to support the rupee.
• Global bond yields, geopolitical uncertainty, and FII outflows (USD 3 billion in January) are identified as major risks for Indian equities.
• Despite weak sentiment, the IPO and deal pipeline remains robust, with domestic institutions driving demand amid lower valuation expectations.
• Gupta advises caution for investors due to global volatility, suggesting capital protection, and notes large-caps are fairer valued than mid/small-caps.

Why It Matters: Budget 2026 will likely focus on governance reforms and rupee-supportive measures, not large stimulus, amid global market volatility.