What’s going to be your top market strategy in 2026? Well, according to CLSA’s latest India Strategy report, the focus for the year is no longer on broad-based momentum but on structural “coiled springs” sectors and stocks that have consolidated long enough to lead the next leg of growth. According to CLSA, “we boost our consumption exposure by adding Eternal and DMart to our India focus portfolio and exit from Reliance and Nestle.”

CLSA on consumption: Cohort-led demand, not a broad recovery

CLSA’s consumption thesis for 2026 is built around demographic segmentation rather than headline growth. The report notes that India’s consumer market behaves like multiple economies operating in parallel, making uniform demand assumptions unreliable. 

For 2026, CLSA sees stronger visibility in urban and emerging affluent cohorts, supported by income tax changes, lower interest rates and premiumisation trends. As part of this, CLSA had decided to, “remove Reliance and Nestle from our portfolio and add Eternal and Avenue Supermarts as their recent pullback has improved risk-reward and discretionary names give us a more leveraged exposure to growth in consumption.”

Rural demand, while stabilising, is not expected to drive incremental growth. Organised retail, discretionary consumption and platforms with operating leverage are positioned to benefit as spending shifts toward formal channels .

Stocks CLSA tracks here

CLSA on rate sensitives: Banks to anchor earnings growth

CLSA expects banks to be the largest contributors to Nifty profit growth over FY26–FY28, reversing the slowdown seen in FY26. The report points to improving system credit growth, gradual margin stabilisation and easing stress in unsecured lending as key drivers. With global interest rates still acting as a constraint on valuation expansion, CLSA prefers banks with scale, funding stability and earnings visibility. Rate-sensitive sectors such as real estate are also seen benefiting from the lagged impact of policy easing, though selectivity remains central to the strategy.

Stocks CLSA highlights

CLSA on IT services: Cyclical tailwinds after earnings cuts

The CLSA report describes 2025 as a year when AI optimism gave way to revenue deflation and earnings downgrades for Indian IT services. For 2026, CLSA sees conditions turning more supportive, driven by an improving US macro backdrop, stabilising discretionary tech spends and easing valuation pressure after underperformance. However, the brokerage cautions that the recovery is likely to be uneven, with stock-specific execution and margin delivery determining outcomes rather than broad sector rerating.

Stocks in CLSA’s IT focus

  • Infosys
  • Tech Mahindra

CLSA on cement and industrials: Profitability over volumes

CLSA expects India’s capex cycle to extend into 2026, supported by government spending, private investment and execution visibility from strong order books. In cement, the report highlights easing competitive intensity following consolidation and notes that GST changes improve the scope for price increases to offset costs. CLSA sees the sector shifting focus from volume growth to margin expansion, which favours large players with cost leadership and balance-sheet strength.

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Stocks CLSA prefers

CLSA on energy and power: Cash flows in a transition phase

CLSA positions energy and power utilities as transition plays rather than growth stories for 2026. The report points to large-scale renewable capacity additions, regulated returns and dividend visibility as the core investment drivers. In upstream energy, production ramp-ups rather than commodity price assumptions underpin earnings visibility. CLSA notes that while oversupply risks exist in parts of the global energy market, Indian utilities and producers remain relatively insulated due to domestic demand and policy support.

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Stocks in focus

CLSA on autos: Early signals of an upcycle

According to CLSA, FY27 could mark a turning point for the auto sector, with 2026 acting as the transition year. The report highlights tax relief, rate cuts and replacement demand as structural tailwinds, particularly for passenger vehicles and commercial vehicles. Two-wheelers are expected to see a selective recovery, while premiumisation trends improve content per vehicle for manufacturers and suppliers.

Stocks on CLSA’s radar

  • Tata Motors
  • Bajaj Auto

CLSA on property: Office leasing offers better visibility

CLSA notes that while housing volumes softened in 2025, price resilience in the luxury segment limited downside. For 2026, lower rates are expected to support mid-income housing demand, but the report sees stronger earnings visibility in office real estate. Leasing activity driven by global capability centres and IT services continues to support Grade-A office demand, making large developers and listed REITs more defensible plays.

Stocks and platforms CLSA tracks

  • Godrej Properties
  • Embassy REIT

CLSA’s 2026 roadmap suggests that the Indian market is entering a phase of “selective outperformance.” The index-level gains may be capped, but the “Focus List” of 18 stocks highlights a preference for leaders with balance sheet strength and structural advantages. For the Indian retail investor, 2026 appears to be a year where “buying the leaders” at corrected valuations might finally pay off.

Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.