SAMCO CEO Jimeet Modi Forecasts Market Consolidation Through 2026

Market Uncertainty Persists, but Worst May Be Behind

Despite ongoing global uncertainties and geopolitical tensions, the Indian stock market is unlikely to experience a runaway rally in 2026, according to Jimeet Modi, Founder and CEO of SAMCO Group. Modi believes that the worst phase of market volatility may be behind us and that 2026 may turn out to be more of a consolidation phase rather than a washout.

Understanding Market Volatility

A washout year in the Indian stock market is characterized by three conditions: a valuation reset, a collapse in earnings growth, and structural balance-sheet damage. As of mid-April 2026, the setup looks nothing like the start of a washout. The Nifty 50 trades at roughly 21 times trailing earnings, which sits close to the 5th percentile of its five-year valuation range.

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Earnings are slowing, not collapsing, with consensus expecting single-digit Nifty EPS growth in FY26 and an acceleration into FY27. On balance sheets, corporate India is entering this period with leverage near two-decade lows and the banking sector with gross NPAs near multi-year lows.

Macro Stress and Market Sentiment

While global uncertainties may continue to weigh on sentiment, markets have already priced in a fair degree of caution. Unless there is a significant escalation of the current conflict into a broader, world-war-like situation, the base case remains that the worst phase of volatility is likely behind us.

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Market Strategy

In the current market environment, it's essential to be cautious and avoid making binary shifts in investment strategies. A balanced approach, maintaining core equity exposure while selectively allocating to debt for stability and considering some global diversification, can help manage volatility.

Investment Framework

A framework-driven process is more effective than a label-driven process, which can lead to investing based on outdated sector labels. The market rewards leadership, price strength, earnings visibility, and balance sheet quality. Investors who listen to the market tend to do better than those who insist on their own classification scheme.

IT Sector Outlook

The IT sector faces significant challenges, including slower discretionary spending by global clients, longer deal cycles, and increasing pricing pressure. The rise of AI is also disrupting traditional IT services, potentially compressing the value chain and impacting revenue growth, margins, and scalability. A selective caution approach is recommended, focusing on companies that are adapting to the new paradigm.

Q4 Earnings Expectations

Expectations from the ongoing Q4 earnings season remain muted, and caution extends into Q1 as well. The combination of global uncertainties, geopolitical tensions, and lingering demand-side softness means that a broad-based earnings revival is unlikely to be visible immediately. Markets may look through the next couple of quarters, focusing less on headline numbers and more on forward guidance and commentary by company managements.