2026 Will Be A Stock-Picker’s Market: Expert Insights for Indian Investors

Ace investor Porinju Veliyath believes 2026 will be a year for stock-specific opportunities, not broad market rallies. While he expects “lots of stocks” to bounce back — with some rising 50% and others 100% — he does not see the Nifty index moving more than 5-10% next year.

Shifting from Index-Chasing to Selective Hunting

“Cherry picking will do well in 2026,” he said, emphasising that investors must shift from index-chasing to selective hunting. This approach requires a thorough understanding of the Indian stock market and its trends.

Reasonable Valuations after Correction

Porinju described the last one year as a bear market for the broader market, even as headline indices touched all-time highs. He pointed out that many stocks are 30–40% below their highs and “many are below their one-year highs,” creating reasonable valuations after the correction of the last five to six quarters.

Despite index strength supported by domestic liquidity, mutual funds and large institutional flows into large caps, the wider market “significantly corrected,” he said. This correction has created opportunities for stock market investing in undervalued stocks.

Commitment to Small-Cap and Mid-Cap Companies

Still, Porinju stays committed to small-cap and mid-cap companies, even as he holds nothing against large caps. He recalled that in 2023, many of Equity Intelligence’s small-cap picks “went 20–30 times and some became large caps,” reinforcing his belief that real wealth creation often happens outside the index heavyweights.

But he cautioned that not all strategies work all the time, noting the cyclical nature of markets. Even from current levels, he believes “there is enough potential to create alpha by sticking to core philosophy and strategy.” This approach requires a deep understanding of technical analysis and fundamental analysis.

Cautious Approach to Valuations

Porinju cautioned new investors against buying 50-, 60- or even 200-PE stocks, calling the trend dangerous. According to him, only 10% of stocks will mint money going forward while 90% will see either correction or time-wise correction. Investors, he stressed, “should be cautious of valuations before jumping in.”

This cautious approach is essential for long term investing and avoiding significant losses. It requires a thorough analysis of the company’s financials, management, and industry trends.

Optimism for Indian Stocks

Despite the corrections and excesses, Porinju remains optimistic: “Indian stocks are still very hot and will continue to be.” But in 2026, he believes the winners will come not from the index, but from smart, selective investing.

This optimism is driven by the growth potential of the Indian economy and the opportunities available in the stock market. However, it requires a disciplined approach to investing and a thorough understanding of the market trends.