Daily Voice: Another 10% rally in 2026? PL Asset’s Siddharth Vora sees earnings, liquidity lining up

Siddharth Vora is the Head- Quant Investment Strategies and Fund Manager at PL Asset Management

• IT and chemicals appear to be potential contrarian opportunities for 2026, said Siddharth Vora.

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According to Siddharth Vora, the Head- Quant Investment Strategies and Fund Manager at PL Asset Management, a 10 percent rally or potentially higher appears achievable in 2026.

This would be supported by improving earnings growth on a lower base, strong domestic liquidity, neutral valuations, and new demand triggers, he said in an interview to Moneycontrol.

In the December quarter earnings cycle starting next week, upgrades are expected to meaningfully outpace downgrades, he believes. In fact, this could mark the start of a more durable earnings upgrade cycle, he said.

Do you believe 2026 is likely to be a year of positive surprises, driven by capex, credit, and consumption growth?

The macro setup for 2026 remains constructive across capex, credit, and consumption. While outcomes are likely to be positive, they may not qualify as major surprises, as markets have already started factoring in a favourable outlook.

Government-led capex provides visibility, private sector balance sheets are healthier, and credit growth remains steady. Incremental upside could still emerge from execution-led gains, particularly if private capex and consumption sustain momentum.

Do you expect the market to deliver an additional 10 percent rally in 2026, following the 10 percent gains seen in 2025?

A 10 percent rally or potentially higher appears achievable in 2026. This would be supported by improving earnings growth on a lower base, strong domestic liquidity, neutral valuations, and new demand triggers.

A conducive monetary and fiscal policy environment, potential trade agreements, and India’s relative underperformance versus emerging markets, developed markets, and gold could attract incremental flows. Additionally, any unwinding of the global AI trade could position India as a relatively neutral and attractive market.

Do you believe the market will receive strong support from earnings surprises in the new year, despite global challenges?

Earnings support is likely to be more sector-specific rather than broad-based. While global challenges may persist, domestic-facing sectors with stronger balance sheets and operating leverage are better positioned to deliver positive earnings surprises. Stock selection will therefore play a more important role in returns.

What are your expectations from the December quarter earnings season starting in January? Do you foresee a sharp increase in upgrades compared to downgrades?

Upgrades are expected to meaningfully outpace downgrades in the December quarter earnings cycle. Financials, metals, and industrials are likely to lead this trend, supported by improving demand visibility, operating leverage, and stabilizing cost structures. This could mark the start of a more durable earnings upgrade cycle.

Are you bullish on the real estate and paint sectors for 2026?

A favourable interest rate environment and stable crude prices are positive tailwinds for both sectors. However, competitive intensity remains high, which could keep margins under pressure. As a result, the opportunity is more stock-specific rather than sector-wide, with a focus on execution capability, balance sheet strength, and pricing discipline.

What is your contrarian bet for the new year?

IT and chemicals appear to be potential contrarian opportunities for 2026. Both sectors underperformed in 2025 due to global slowdown concerns and pricing pressures. Select companies could emerge as outperformers as demand stabilizes and valuations remain attractive relative to long-term fundamentals.

Are you positive on new-age digital consumer companies for 2026?

From a growth perspective, the outlook remains constructive as digital adoption continues to deepen. However, from a valuation and financial discipline standpoint, caution is warranted. The market is increasingly rewarding profitability, cash flow generation, and sustainable unit economics, which will be key differentiators within the space.