by Shrikant Chouhan, Head Equity Research, Kotak Securities.
Pune, 16 October 2025: Kotak Securities, one of India’s leading brokerage houses, has released Top Stock Picks for Muhurat Trading on this Diwali – Samvat 2082.
How Samvat 2081 went
Indian markets have been lackluster in Samvat 2081 and underperformed several global peers. This is primarily attributed to earnings weakness and tariff uncertainty, compounded further by a series of geopolitical and macro headwinds. The Nifty touched a low of 21750 in March 2025, while BSE Sensex touched a low of 71500, with both benchmark Indexes losing around 1.5 % each during Samvat 2081. The Nifty Midcap and Smallcap Index underperformed and lost ~5.6% and ~5.4% respectively. The downward movement and underperformance of Indian markets was surprising considering efforts by global community to solve geopolitical tensions, easing global and domestic inflation, easing crude prices, interest rate cuts by RBI and Fed, GST rationalization, increase in income tax slabs and progress on various tariff agreements by Indian Government. The downward movement was driven by heavy FII selling to the tune of $27.3 bn (or Rs 2.4 lakh crores). While the DIIs set forth their conviction in Indian capital market by infusing Rs 4.5 lakh cr in the last one year, the retail category (via SIPs) wasn’t behind and invested Rs 28000 cr each in August and September 2024 and Rs 137000 cr in H1FY26. Samvat 2081 belonged to Bank Nifty (+7.2%) and Autos (0.5), while worst performers were BSE IT (-20.5%), BSE FMCG (-13.3%), BSE Real Estate (-16.8%), BSE Utilities (-18.5%) and BSE Consumer Durable (-12.2%).
Situation of developed economies
US rate cuts have resumed, although we still expect the Fed to adopt a cautious approach. For US trade tensions are expected to deliver sub-trend growth in the second half of CY25, but the uplift in consumer income may help the U.S. economy avoid a recession. Inflation is expected to increase in Q4CY25, as the effects of tariffs begin reflecting in consumer prices. For Europe, while trade policy uncertainty will likely remain a drag on the economy, GDP growth is expected to slow only modestly in the near term and then pick up at the end of 2025 and early 2026, driven by rate cuts and fiscal easing. However, larger geopolitical and competitiveness challenges remain, with productivity growth a key hurdle for the region. Key themes affecting China’s outlook include ongoing trade uncertainty, the implementation of counter-cyclical economic policy to stabilize growth and a wave of innovation, as seen in the recent success of DeepSeek. On the domestic front, expectations for additional policy stimulus have been lowered and housing market weakness has reemerged.
Domestic factors
Both the RBI and GOI have adopted several growth-stimulating measures over the past few quarters, which should now begin to yield results, with risks evenly balanced depending on the magnitude of slowdown in global growth. The GOI, on its part, had earlier provided a budgetary stimulus of Rs 1 lakh crores through personal income tax foregone, which, coupled with GST benefits, is expected to encourage consumption. A well-distributed and normal monsoon rainfall, multi-period high real rural wage growth, the advent of the festive season, and a lower base effect are additional growth drivers for H2FY26 and can help boost market sentiments going forward. Brent crude oil prices at around US$65/barrel are healthy for the economy. Even August CPI inflation of 2.1% is benign. S&P’s upgrade of India’s sovereign credit rating to investment grade (from BBB- to BBB)—the first upgrade in 18 years and the highest S&P rating received in the past 35 years rekindles sentiments in Indian Market. We expect real GDP to growth at 6.5% each for FY26, FY27 and FY28.
We are cautiously bullish on India for Samvat 2082
We expect (1) some stability in earnings after large downgrades over the past 12-15 months and (2) strong growth in earnings in FY27 (18% for the Nifty- 50 Index). We note a moderation in the pace of EPS downgrades over the past few months, although Q2FY26 may see some more downgrades, given the prevailing weak demand environment. We expect earnings growth to be fairly broad-based for FY27, which gives us confidence about our earnings estimates. Of course, global events can still derail the earnings recovery story. We expect (1) stabilizing earnings, (2) strong growth in earnings of 17.6% in FY27 to Rs 1297 and of 14.3% in FY28 to Rs 1487 and (3) a steady macro to provide a ‘high’ floor to the market but (1) rich valuations across sectors and stocks and (2) global headwinds to act as a ‘low’ ceiling to the market. The market may offer modest returns over the next 12-15 months with growth in earnings being partly offset by lower multiples. Based on our assessment of markets, sectors and stocks, we have identified 7 potential stock ideas which are expected to do well in Samvat 2082. Happy Investing!