Kotak Predicts 2026 Stock Market Comeback: 3 Key Reasons & Top Stock Picks Revealed

• Kotak Institutional Equities forecasts a strong Indian stock market recovery in 2026 after a sluggish 2025, driven by earnings, domestic demand, and macro stability.
• Three key drivers for 2026 comeback: earnings recovery, improved domestic consumption (due to tax cuts, GST, easing interest rates), and a stable macro environment.
• 2025 saw average returns due to high valuations, weak profit growth, and FII sell-offs, with large-cap stocks outperforming mid and small caps.
• Kotak's model portfolio changes include adding Dixon Technologies and Aadhar Housing Finance, increasing stake in Indigo, and reducing Bharti Airtel and Reliance Industries.
• Nifty 50's net profit growth is estimated at 18% for FY2027 and 15% for FY2028, with Financials, Metals, Oil & Gas, and Telecom leading.

Why It Matters: Kotak sees 2026 as a strong comeback year for Indian equities, driven by earnings and consumption.