EVs, Automobiles to ACs: Emkay Picks 5 Consumption-Led Segments Poised to Power the Market in 2026

Market Outlook 2026: Improving demand trends, stronger earnings visibility, and the continued benefits of GST rate cuts are set to drive a robust recovery across consumer-focused sectors, including automobiles, EVs and air conditioners. Alongside these, themes such as healthcare, materials and industrials are also expected to play a dominant role in shaping the market in 2026, according to Emkay Global Research.

Companies operating in automobiles, electric vehicles (EVs), air conditioners (ACs), consumer durables, and quick commerce are well-positioned to outperform in 2026, according to Seshadri Sen, Head of Research at Emkay Global.

Key Consumer Themes To Dominate Indian Stock Market In 2026

GST rate cut and consumption recovery is likely to boost the economy with automobiles and durable goods among the top gainers in the consumption categories, as per Emkay's Market Outlook 2026 report released on Thursday, December 11.

"Autos, where we prefer passenger vehicles and two wheelers, high quality EV companies in two wheelers, consumer durables. AC companies are also expected to do well. Low base, significant GST cuts will help them as there will be warm summer next year," Sen said, responding to a GoodReturns query on Thursday.

"Internet driven consumption themes, will continue to do very well including quick commerce, retail, other new-age companies, as well," he added while maintaining a careful stance on value retail firms.

Market Outlook 2026: Nifty To Reach 29,000 In 2026

The financial services firm expects Nifty 50 to reach the 29,000 mark in the calendar year 2026. The boost in Nifty 50 will be supported by a recovery in the discretionary consumption in the first half of financial year 2025-26. Additionally, easing liquidity infusion by the Reserve Bank of India, mixed capex cycle, expectations of India-US trade deal will also impact the market growth.

"India's medium-term outlook remains remarkably resilient. Despite near-term volatility, the alignment of softer rates, improving consumption and stable policy direction creates a strong foundation for the country's multi-year growth cycle, positioning the Nifty for meaningful upside through 2026," stated Nirav Sheth, CEO - Institutional Equities, Emkay Global.

Discretionary, Healthcare To Perform Well; Financials, IT, Telecom May Suffer

For the year 2026, Emkay maintained an overweight stance on discretionary, industrials, healthcare and materials sectors. However, companies linked to financials, staples, IT and telecom sectors may struggle next year. "Financials face continued de-rating pressures for large banks and intensifying competition from PSU lenders and NBFCs. On the other hand, IT sector, despite being more reasonably valued, is expected to see a sustained recovery by CY26 as global tech spending stabilises," noted Emkay in its report.

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