As Indian equity markets grapple with muted momentum and the Nifty struggles to decisively reclaim the 26,000 mark, the big questions facing investors revolve around timing and leadership. Will small and midcaps regain their mojo in 2026? Can market momentum meaningfully improve after a sluggish 2025? And how disruptive could the much-anticipated Zepto IPO be for the fast-evolving quick commerce space?

Speaking to ET Now, Ashi Anand, Founder & CEO, IME Capital offered a measured, ground-up view that ties market direction firmly to economic and earnings fundamentals, while also flagging intensifying competition in new-age consumption themes.

On the much-debated revival of small and midcap stocks, Anand cautioned against premature optimism. “For small and midcaps to come back, you first need the overall markets to come back. You need momentum in the economy and corporate earnings, so that is actually the first level.” He noted that investors are closely tracking the ongoing results season for early signs of an earnings turnaround across sectors. According to him, clarity on macro variables—especially the contours of the US-India trade deal—remains a critical missing piece.

Without that visibility, expecting an early surge in the broader market may be unrealistic. “I think expecting to see small and midcaps recovering without clarity around this overall corporate earnings recovery, that is probably unlikely,” Anand said, adding that largecaps are likely to continue outperforming over the next quarter or two. Participation from small and midcaps, he stressed, will come only as confidence around earnings recovery strengthens.

Addressing the broader question of market momentum, Anand expressed cautious optimism about 2026. “We are fairly confident that the momentum of the markets in 2026 would actually be upwards,” he said, while explaining that 2025’s weakness needs to be seen in context. After two years of strong performance, markets have been digesting a slowdown in economic growth and corporate earnings, compounded by global uncertainties that were absent earlier.

However, the groundwork for a recovery appears to be taking shape. Anand pointed to policy measures rolled out over the past several months—income tax cuts in lower slabs, GST rationalisation and interest rate cuts—as factors that could revive consumption. Stress in the banking sector, from net interest margin pressures to asset quality concerns, also seems to be easing. “As you are getting into 2026, there are clear signs of parts of the market which were under strain starting to come back,” he noted.

Beyond macro and market cycles, investor attention is also firmly on the quick commerce segment, especially with Zepto’s proposed IPO. Anand described the listing as one that will be “very interesting and very closely watched,” both from a valuation and competitive standpoint. Unlike peers such as or , which straddle food delivery and quick commerce, Zepto is a pure-play bet on rapid delivery—a business growing faster but still deep in investment mode.