After one of the weakest years for Indian equities relative to global peers, 2025 left investors facing earnings downgrades, foreign institutional investor (FII) selling, and patchy demand. However, UTI AMC 's Executive Vice President & Fund Manager V. Srivatsa believes 2026 could mark a significant turnaround, with improving macroeconomic conditions setting the stage for a more constructive market environment.

Market Performance Analysis for 2025

The year 2025 proved challenging for Indian equity investors, with the Nifty delivering modest returns despite maintaining its streak of positive performance.

Srivatsa noted that this performance was driven by consistent earnings cuts throughout the year, combined with macro weakness in terms of demand and liquidity during the early part of the calendar year. The earnings downgrades, coupled with valuation triggers in other emerging markets, led to sustained FII selling pressure that further weighed on market sentiment.

Government Stimulus Measures and Recovery Outlook

Despite the challenging environment, the government implemented several measures to stimulate economic activity and improve market conditions:

• Income tax cuts to boost consumer spending
• GST rate reductions across various sectors
• Enhanced liquidity in the banking system to support credit growth

These policy interventions, implemented in the latter part of 2025, are expected to generate tangible benefits from the first quarter of 2026. Srivatsa expressed optimism about decent earnings growth for the next fiscal year, with the combination of improved macroeconomic fundamentals and earnings recovery boding well for Indian equity markets.

Segment-wise Market Dynamics

The fund manager addressed concerns about mid-cap and small-cap performance, acknowledging the pain experienced by investors in these segments. While earnings outlook for both categories appears to be on an improving trajectory, valuation considerations remain important.

Srivatsa expects large caps to spearhead the market recovery, given their relatively attractive valuations compared to mid and small-cap indices.

Sectoral Investment Strategy

Based on a relative value approach with emphasis on starting valuations, Srivatsa identified several sectors positioned favorably for the next 12 months:

• Information Technology: Well-priced for growth expectations
• Oil and Gas: Attractive valuation metrics
• Healthcare: Strong fundamentals and reasonable pricing
• Infrastructure: Benefiting from government focus
• Telecom: Positioned for sector recovery

These sectors are considered to offer compelling risk-reward profiles given their current valuations relative to growth prospects.

Key Risk Factors for 2026

While optimistic about the overall market trajectory, Srivatsa highlighted US trade tariffs as the primary risk factor for 2026. If no resolution emerges within the next six months, potential impacts include:

• Pressure on India's current account deficit
• Significant impact on export-oriented sectors
• Particular vulnerability for textiles, gems, and engineering sectors with high US export exposure

Despite the challenges faced in 2025, the achievement of Nifty's 10th consecutive year of positive returns demonstrates the resilience of Indian equity markets and provides confidence to retail investors, particularly first-time equity participants.

UTI AMC has announced a significant board change with the resignation of a long-serving director. The asset management company informed stock exchanges about the departure of Mr. Flemming Madsen from his position as Non-Executive Nominee Director, marking the end of a nearly 16-year tenure with the organization.

Director Resignation Details

The company disclosed that Mr. Flemming Madsen (DIN: 02904543) tendered his resignation as Non-Executive Nominee Director with effect from December 31, 2025. His departure coincides with the end of his association with T. Rowe Price International Ltd on the same date.

Regulatory Compliance and Timeline

UTI AMC received Madsen's resignation letter on December 16, 2025, at 21:25 hours IST. The company promptly disclosed this information to comply with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The resignation will be effective from the close of business hours on December 31, 2025.

Director's Farewell Message

In his resignation letter dated December 16, 2025, from Baltimore, Madsen expressed gratitude for his tenure with UTI AMC. He stated that it had been "a great privilege and joy" to serve on the board throughout nearly 16 years. The departing director acknowledged the tremendous growth experienced by both the firm and the Indian mutual fund industry during his tenure.

Madsen offered his best wishes to the broader UTI team, clients, and other stakeholders for continued growth in the years ahead. As a Non-Executive Nominee Director representing T. Rowe Price, he indicated that his board seat would be vacated as his association with T. Rowe Price ends on December 31, 2025.

Corporate Governance Impact

The resignation represents a notable change in UTI AMC's board composition, given Madsen's extended tenure and his role as a nominee director from T. Rowe Price International Ltd. At the time of his resignation, Madsen was not serving on any board committees, which may minimize the immediate operational impact of his departure.

The company has fulfilled all disclosure requirements under the SEBI Listing Regulations and made the information available on its website as per regulatory guidelines. This resignation follows standard corporate governance practices when nominee directors' associations with their nominating entities conclude.