Market analysts have identified five stocks showing consistent score improvement, presenting upside potential of up to 36% as investors navigate continued market volatility. The stock selection comes at a time when market participants are preparing for increased focus on fundamental business performance.

Market Outlook and Volatility Expectations

The volatility quotient of the street is expected to remain high for the next few sessions. However, market dynamics are anticipated to shift significantly as the calendar moves into 2026, when business updates will begin to dominate market sentiment and trading patterns.

Earnings Season Impact

Quarterly earnings updates are positioned to become the primary determinant of both overall market direction and individual stock performance. This transition represents a shift from current market conditions toward fundamental analysis-driven trading patterns.

For investors unfamiliar with earnings updates, these quarterly business performance reports provide crucial insights into company financial health, operational efficiency, and growth trajectories. The earnings season typically brings increased focus on revenue growth, profit margins, and forward guidance from corporate management.

Sector-Specific Considerations

Certain sectors, particularly those impacted by US developments, may experience heightened sensitivity during the upcoming period. These sectors could see amplified price movements based on both domestic earnings performance and international market influences.

Investment Strategy Framework

The identified stocks demonstrate consistent score improvement patterns, suggesting strengthening fundamental metrics or technical indicators. The upside potential of up to 36% reflects analyst projections based on current market conditions and expected business performance.

Investors should consider the dual nature of current market conditions: near-term volatility coupled with the approaching earnings-driven market phase. This environment may present both opportunities and risks for equity investments.

Market Transition Timeline

The transition from volatility-driven markets to earnings-focused trading is expected to accelerate as 2026 approaches. This shift typically brings increased attention to company-specific fundamentals rather than broader market sentiment or external factors.

The Indian stock market experienced a notable shift in investor behavior during a year characterized by regulatory changes, global geopolitical events, and periods of heightened volatility. While active participation moderated across the industry, the underlying growth in demat accounts reflects the evolving maturity of India's capital markets.

Demat Account Growth Trends

New demat account additions fell by over 20% between December 2024 and November 2025, according to data from depositories. Despite this decline in new additions, the total number of demat accounts expanded by around 15% between December 2024 and January 2025, based on NSE data.

Ankit Jain, Chief Product & Technology Officer at Choice Broking, explained that "volatility impact is visible in 'monthly active' softness and broker-level churn even while total demat counts keep rising. Investors often pause direct equity trading during drawdowns, while systematic MF investing (SIPs) remains more resilient."

Structural Market Evolution

Ambarish Kenghe, Group CEO of Angel One, identified this trend as reflecting "a structural shift; investors are increasingly approaching markets with a longer-term mindset rather than reacting to short-term noise." Market order activity demonstrated strong recovery after touching a low around February, growing over 20% by November.

The growth shows underlying resilience of Indian markets, particularly given continued FII outflows and global uncertainty. Kenghe noted that this rebound "even amid external headwinds, indicates the depth and maturity that India's capital markets are building over time."

Demographic and Geographic Drivers

Several key factors are powering the sustained growth in market participation:

• Geographic Expansion: Growth increasingly driven by tier-2/3/4 and smaller towns
• Digital Access: 24×7 mobile access and local-language content facilitate participation
• Young Demographics: Large share of new accounts from investors under 30
• Technology Integration: Digital onboarding and frictionless KYC compress multi-day processes into minutes

At Angel One, the average age of clients joining the platform is around 29, with many entering markets within their first few years of earning. "They often start with low-ticket investments or small SIPs and gradually increase participation," Kenghe observed.

Investment Behavior Patterns

Jain highlighted distinct patterns in how different investment vehicles engage participants:

Future Growth Outlook

Looking toward 2026, industry leaders expect continued evolution in market participation patterns. Kenghe emphasized that "the story is unlikely to be about more accounts alone. It will be about deeper, more resilient and intelligent participation."

As long as India's macro fundamentals remain strong and household savings continue shifting from physical to financial assets, demat and mutual fund penetration should continue rising. However, Jain cautioned that "the growth slope will track market returns and IPO cadence. A prolonged low-return phase can slow new demat additions and reduce actives, while strong primary market cycles can re-accelerate onboarding."