UTI AMC's V. Srivatsa anticipates a potential turnaround for Indian equities in 2026, following a challenging 2025. Despite earnings downgrades and foreign institutional investor (FII) selling, policy support and stabilizing earnings are expected to improve macroeconomic conditions. While large caps may lead the recovery, mid and small caps also show positive earnings trends. Srivatsa notes that 2025 underperformed global markets due to earnings cuts and macro weakness, but government stimulus measures implemented late in the year are expected to yield benefits in early 2026.