Motilal Oswal Private Wealth, in its yearly outlook, said that India’s relative valuation standing is strengthening in 2026. According to the company, this strengthening is led by improving valuations, early signs of earnings recovery, domestic policy tailwinds, and conclusion of trade deal.

The top leadership of the firm said that manufacturing incentives, boost for services, logistics improvement, and asset monetisation should improve the conditions for sustained profit growth over the long term.

The private wealth manager also launched the Alpha Strategist – January 2026 report, ‘’The Daedalus Way’. The report cautions against narrative-driven euphoria and macro-induced pessimism alike.  It underscores the importance of disciplined portfolio construction for sustainable wealth creation, driven by valuation-led asset allocation and execution, rather than short-term narratives or market noise.

Ashish Shanker, MD and CEO, Motilal Oswal Private Wealth, said, “While global factors such as moderating AI momentum, geopolitical tensions and trade realignments will remain relevant, India enters 2026 on stronger footing with improving valuations, better earnings visibility and supportive policy tailwinds.”

Sandipan Roy, Director, Chief Investment Officer, Motilal Oswal Private Wealth, said, “As India heads into 2026, we see key headwinds easing – relative valuations have improved, earnings recovery is gaining traction, AI exuberance is cooling and currency pressures have stabilised. At the same time, domestic policy tailwinds, including interest rate cuts, tax relief to boost consumption, GST slab rationalisation and sustained RBI liquidity support, are expected to translate more meaningfully into growth and earnings.”

Equity portfolio strategy:

• Indicative allocation – 50% to large caps and hybrids, 40% to mid and small caps, and 10% to global markets.
• For stability and steady compounding, a balanced approach is recommended. Large caps/hybrids to be a core allocation in portfolios which should be complemented with staggered investing over the next 2-3 months in mid and small caps. While an index-led or hybrid strategies is preferred for large caps and active, focused strategies should work better for mid and small caps.
• Lump-sum allocations can be made in hybrid funds at current levels while a staggered SIP/STP approach should be adopted for pure equity strategies over the next 2-3 months.

Fixed income

The leadership of the company think that a likely softening by the US Fed, the RBI’s neutral stance is expected to remain data-dependent, opening room for further rate cuts during CY26.

Beyond rate action, RBI is actively injecting liquidity into the system through open market operation (OMO) purchases, USD/INR swaps, and cash reserve ratio (CRR) cuts. RBI OMO intensity will need to increase materially for yields to stabilize.

Portfolio Strategy:

• Allocate 45-55% of the fixed income portfolio to performing credit and private credit strategies, selective infrastructure investment trusts (InvITs), real estate investment trusts (REITs), and non-convertible debentures (NCDs) for a minimum period of 3-5 years. InvITs may see some capital appreciation due to softening rates.
• For shorter holding periods, allocate in relatively liquid fixed income alternative solutions like Arbitrage Funds (three months minimum holding period), Hybrid SIF Funds (minimum two years), and Conservative Equity Savings funds (minimum three years).
• Consider tactical allocation to long-duration G-Secs (10 /15 year) at yield levels of ~6.8-6.9%/7.1-7.2%), for investors comfortable with duration risk, offering scope for capital appreciation and steady coupon income.

Commodities (Gold / Silver) Outlook

As per Motilal Oswal Private Wealth, gold’s rally has been largely structural and policy-driven, and it continue to view gold as a strategic portfolio asset amid ongoing fiscal imbalances, currency debasement, and an uncertain monetary policy outlook.

On the other hand, the firm thinks that silver’s sharp rally has been driven by structural supply constraints amid rising industrial demand from solar, EVs, and technology, though its higher volatility may warrant a more measured approach in 2026.

Portfolio Strategy:

• Gold: Maintain a neutral asset allocation for portfolio stability, accumulate gradually during market dips for moderate returns over a medium term.
• Silver: Retain exposure to silver in portfolios; consider partial profit-booking for large exposures, and staggered accumulation on corrections for those with no-to-low exposure.