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GoalFi - a smallcase manager has released a report - on the market return expectation in FY26. As per the research house, the benchmark index Nifty is expected to post a 8–10% annualized return in FY26, 8–12% for Sensex.

According to GoalFi, the domestic-focused companies are well positioned to mitigate risks like US tariff hikes or commodity price inflation. It believes, tourism is a breakout theme for FY26, also Large cap Private Banks are expected to see a credit growth of 14–16% in FY26. The benchmark indices have gained around 7% in FY25.

Nifty and Sensex Targets for FY26

GoalFi anticipates a growth of 12–16% from current levels by March 2026, translating to a potential range of 8–10% annualized return over the next 12 months from March 25, 2025. These estimates assume a 12–15% corporate earnings growth rate and a forward PE multiple of 19–21x FY26 earnings, as tracked in GoalFi’s research. The projected upside for Sensex is 14–18%, implying an 8–12% annualized return over the same period.

Speaking on the report launch, Mr Robin Arya, Founder & CEO, GoalFi said, Nifty and Sensex’s potential upside indicate a robust outlook, driven by robust earnings growth. A combination of global and local factors, return of FII flows will help post higher growth. Domestic-focused companies can mitigate risks like US tariff hikes or commodity price inflation, we expect a significant opportunity in these areas.
 

Emerging Themes Tourism: A Breakout Theme for FY26

Religious tourism is a big thing to watch out for, there are over 300 million domestic pilgrims annually (pre-COVID), this is expected to rise by 10–12%. Medical Tourism segment is projected to grow at 18–20% CAGR, reaching a $13–15 billion market by 2026. Infrastructure investments (100 new airports by 2030, 8–10% annual road expansion) enhance connectivity thereby providing broader support. The rural demand is expected to be up 5–7% YoY, the urban spending will see a rise of 6–8%, per early 2025 trends. The capex Cycle will see a big rise with, private capex projected to rise 12–14% YoY. The government infra spend is expected at Rs.11–12 lakh crore.

GoalFi has launched a new smallcase to tap into the Tourism theme called Tourism Titans. This strategy will provide investors with diversified exposure to India’s thriving tourism economy, spanning airlines, hotels, medical travel, and more.

Sectors to Watch Out For

The large private banks’ credit growth is expected at 14–16% in FY26. The return on Equity (RoE) expected to be at 15–17%, with NPAs below 1%. Housing loan demand up 12–15% YoY, driven by 7–8% annual urbanization. Loan disbursals to grow 15–18%, fueled by 10–12% SME expansion. Discretionary spending growth of 8–10% supports 18–20% AUM rise. GoalFi’s India's Financial Growth Theme highlights these sectors for their growth + resilience.

Key Stocks

GoalFi expects a 15–20% revenue growth across hospitality, travel, and infra in the tourism sector. A 12–15% earnings growth for banks, 18–22% AUM growth for NBFCs. 20–25% sector revenue increase YoY, driven by 40–50% export growth for Defence sector related companies. GoalFi avoids stock-specific calls but focuses on high-conviction opportunities.

Risks and Opportunities for Markets Risks:

While there is a US Policy Risks in the form of the proposed tariff hikes, a 10–20% tariff on imports could reduce India’s export growth by 2–3%.  Wars in key regions may raise oil prices to $90–100/barrel, risking 5–7% FII outflows. The commodity prices (steel +8–10%, crude +10–12% YoY) could push CPI to 5–6%, squeezing margins by 100–150 bps. The domestic-Focused companies which have a 60–65% of Nifty earnings, with 20–25% lower volatility vs. export-heavy peers are an opportunity. GDP growth of 6.5–7% + ?2.5–3 lakh crore DII inflows act as a buffer.