Nifty To Hit 29,300 In 2026, Says Nomura As It Lists Top 20 Stock Picks - Details Inside

Nomura expects Indian equities to close 2025 on a considerably more stable footing than at the start of the year, supported by calmer global conditions, a cyclical recovery in domestic growth and easing valuation concerns. In its India Strategy outlook, the brokerage has set an end-2026 Nifty target of 29,300, implying a potential 12% return from current levels.
However, Nomura notes that the broader economic and technological backdrop remains unsettled, and that the path to a new macro equilibrium is still unclear.
The target is based on 21 times December 2027 forecast earnings, adjusted for a 3% downside to current consensus estimates. Nomura expects Indian markets to trade in a band of 20–22 times forward earnings, assuming risk premia remain low.
The brokerage highlights that valuation worries have eased since mid-2025, when markets stabilised after the tariff-related volatility. Improving geopolitical conditions, stable macro indicators, and a broad-based recovery in economic and corporate earnings have further strengthened confidence.
Domestic equity inflows have remained resilient, accounting for 13% of gross financial savings in fiscal 2025. Primary market activity has also kept pace. While foreign investor participation has been lukewarm, Nomura believes that the alignment of India’s valuation premium with long-term averages could support a gradual return of foreign flows in 2026, particularly if the global technology-led rally moderates.
Nomura’s outlook is not without risks. The global policy and technology environment remains unpredictable, and any rise in risk premium, sharp slowdown in global growth, or spike in commodity prices could cloud the Indian equity narrative.
Corporate earnings, Nomura suggests, are likely to recover meaningfully in financial year 2026, helped by a low base and a rebound in cyclical and commodity-linked sectors such as chemicals, oil and gas, cement and metals.
Over the past year, however, consensus forecasts for financial year 2026–2028 have been trimmed by 4%-8%. While risks to fiscal 2026 earnings appear limited due to improving domestic demand and policy-led consumption support, Nomura sees some downside risk to FY27–28 estimates if corporate capex remains sluggish and the trade deficit widens.
Given the uneven recovery across sectors, Nomura advises a selective approach. It recommends avoiding richly valued, narrative-driven stocks where stretched expectations raise the risk of disappointment.
Instead, it favours areas where sentiment is subdued but fundamentals may improve, such as commercial vehicles, pharmaceuticals, IT services and non-bank lenders.
The brokerage also encourages investors to increase exposure to underperforming exporters and to remain cautious in areas with heavy government intervention.