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ETMarkets.com India’s equity markets are poised for a strong upside over the next year as government measures and improving liquidity strengthen fundamentals, according to Pramod Amthe, Head of Institutional Equity Research at InCred Capital.Amthe said the brokerage has upgraded its market stance from “Neutral” to “Overweight” in early October after 18 months, citing improving macro indicators and policy support.“We are looking at a base case upside of around 10%, taking the Nifty to 28,000 by December 2026, and in a bull case, the index could rise up to 19% from current levels,” he said in an interview with ET Now.Liquidity, policy support fueling market sentimentAmthe credited the RBI’s liquidity infusion and the government’s GST rationalisation and capex measures for reviving market momentum.“The government and the RBI have provided enough ammunition to address recent macro weaknesses. This marks a turning point after months of consolidation,” he noted.Live EventsYou Might Also Like:ETMarkets Smart Talk| Aditya Sood sees multi-year upside in financials and domestic manufacturing themesHe added that the ongoing interest rate easing cycle, combined with domestic consumption recovery, could further cushion equity markets against global volatility.Earnings season: Bottoming out phase, watch for management commentaryOn the ongoing Q2 earnings season, Amthe said results have so far met subdued expectations, with flattish sales growth but a healthy rebound in profits (PAT).“Only 10% of companies have announced results due to the delayed festive season, but the initial trend shows that margins are holding up better than expected,” he explained.You Might Also Like:Five forces behind the 5-day rally in metal stocks. Is this a short-term rush or dawn of a metal supercycle?He emphasized that management commentary will be crucial in gauging the outlook for the IT, consumption, and capital goods sectors.“We are closely tracking how large-cap IT firms adapt to the AI-driven business model and how consumption companies assess post-festival demand,” Amthe added.He expects the ongoing earnings downgrade cycle to bottom out in Q2 FY25, with stabilization and potential upgrades from Q4 FY25 onward.Metals back in focus; InCred upgrades Tata Steel, JSPL, and SAILAmthe said InCred Capital has turned overweight on metals, led by improving domestic demand and stable pricing.You Might Also Like:CDSL, Tata Consumer among top buys as markets regain uptrend: Rajesh Bhosale“We have upgraded Tata Steel, JSPL, and SAIL to ‘Add’ ratings from earlier cautious stances,” he revealed.He expects the steel cycle to remain resilient, driven by private capex recovery and limited downside from global protectionism.“Profitability in the steel segment appears protected, while demand is likely to strengthen as domestic consumption rises,” he noted.Amthe, however, maintained a cautious view on Jindal Steel due to its rich valuations, even as the broader metal index continues to outperform.Broader outlook: Earnings stabilization to drive next leg of the rallyAccording to Amthe, markets have moved past the consolidation phase and are entering a more earnings-led rally phase.He believes that from early 2025 onwards, corporate profits will start improving across cyclical sectors such as metals, banking, and industrials.“Once earnings stabilize, markets will gain further strength, and investors should focus on sectors with visible margin recovery and operating leverage,” he said.Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our ETMarkets WhatsApp channel) Read More News onNifty 28000 predictionPramod Amthe InCred CapitalIndian equity market outlookGovernment policy supportCorporate profits forecastQ2 earnings seasonInvestment strategies IndiaRBI liquidity measuresSteel sector analysisMetals market recovery (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless (You can now subscribe to our ETMarkets WhatsApp channel)Read More News onNifty 28000 predictionPramod Amthe InCred CapitalIndian equity market outlookGovernment policy supportCorporate profits forecastQ2 earnings seasonInvestment strategies IndiaRBI liquidity measuresSteel sector analysisMetals market recovery(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. 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