Nomura pegs Nifty 50 target for 2026-end at 29,300: What could drive the index? Explained

Global brokerage firm Nomura has turned optimistic on Indian equities for 2026, setting a year-end Nifty target of 29,300—about 12% higher than current levels.

The projection is based on valuing the index at 21 times estimated December 2027 earnings, while also accounting for a possible 3% downside to the prevailing consensus earnings forecasts.

Nomura anticipates that Indian equities will trade at 20–22 times one-year forward earnings, provided risk premiums stay subdued. The firm had eased its valuation worries back in May 2025, after markets steadied in the aftermath of global tariff-related tensions.

What's behind the positive outlook?

Saion Mukherjee of Nomura said in the note that the optimistic view stems from a blend of easing geopolitical tensions, steady macro fundamentals, and a cyclical rebound in economic activity and corporate profitability.

Additionally, policies focused on boosting domestic growth, enhancing self-reliance, and driving structural reforms are likely to further strengthen overall market confidence.

"We further expect policies to support domestic growth with a focus on self-reliance and efforts that seek to address structural issues," Mukherjee said.

Meanwhile, domestic inflows remain strong and valuations are high, reducing the influence of foreign institutional investors (FIIs) in recent months. Although, Nomura does not foresee a sharp rise in FII inflows in 2026 but a gradual uptick is possible, especially if global equity markets cool off.

Corporate earnings are projected to rebound in FY26, with low double-digit growth led by commodity-linked sectors such as chemicals, oil & gas, cement, and metals, according to the brokerage firm.

Over the past year, consensus earnings expectations for FY26–28 have been trimmed by 8%, 6%, and 4%, respectively. Current estimates factor in earnings growth of 14.6% for FY27 and 13.2% for FY28.

Nomura's top stock picks

The brokerage firm continues to hold a positive outlook on financials, pharma, IT services, consumer discretionary, real estate, internet, cement, telecom, and manufacturing.

The firm stays ‘Neutral’ on autos, oil & gas, and metals, and recommends a more cautious approach toward consumer staples, infrastructure, capital goods, and healthcare services.

The firm has listed top 20 stock ideas which is mix of large-caps and mid-cap companies.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.