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Below Perspective on FY 26 Equity Market Performance and FY27 Investment Outlook by Vikas Gupta, CEO & Chief Investment Strategist, OmniScience Capital

“FY2026 had started on a positive note with March 2025 giving a solid base to the markets. The rally broadly continued until December 2025. From January 2026 the market started fumbling and after the start of the US-Israel-Iran war the markets have continued performing badly with oil prices exploding, FIIs continuously pulling out money, and accelerating the INR depreciation against the USD. The market has corrected nearly 11%-12% from the beginning of the war.

The developments are concerning from a fundamental economic point of view. High oil prices are in itself concerning and the scenario of potential shortage of oil and gas supplies would make things fundamentally difficult for the economy and citizens. However, the successful efforts by the Government of India to secure the movement of Indian vessels carrying oil and gas in the Strait of Hormuz significantly reduces the probability of such a scenario. 

Barring the scenario of any significant shortages of oil and gas supplies to India, the situation looks very attractive from a long-term investment perspective. The current PE ratio of Nifty 50 is below 20 and the PB ratio is around 3.1. Similarly, the Nifty midcap and smallcap PE and PB ratios are significantly below their typical levels. Although, many darlings of Mr. Market still remain above their intrinsic values, as you go deeper into the index constituents many of them are reaching levels which could indicate significant discounts to their intrinsic values.

From a 1, 3 and 5 year perspective the probability of returns higher than the long-term index returns is significantly enhanced. For an actively curated portfolio of stocks available below their intrinsic value, the probability of significant alpha over the next 3-5 years is very high at the end of FY26 and augurs a good beginning for FY27.”

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