Garg: Earnings to strengthen by 2026, but broad lift needs credit, capex alignment

• Anirudh Garg expects earnings growth to strengthen into 2026, but broad acceleration hinges on synchronized credit growth, government capex, and private investment.
• A 15-20% market rally in 2026 is possible but not a base expectation, requiring strong earnings and easing cost of capital to align.
• New-age stocks in 2026 will see differentiation, rewarding clear unit economics and free cash flow over revenue growth alone, due to high competitive intensity.
• Power sector earnings visibility remains strong in contracted and regulated segments, driven by sustained demand, grid capex, and stable policy.
• Bank of Japan's rate hike signals policy normalization, potentially tightening global financial conditions and causing financial spillovers for emerging markets like India.

Why It Matters: 2026 earnings growth is likely, but broad market rally depends on multiple economic factors aligning.