Analyst sentiment toward Indian equities has turned significantly more optimistic, with buy calls accounting for nearly 70% of 8,533 analyst recommendations on Nifty 500 companies as of 21 July, up from 66.1% at the end of December 2025. According to a Mint analysis of Bloomberg data, this represents a notable improvement in market confidence. The share of hold ratings declined to 17.3% from 19%, while sell calls fell to 13.1% from 14.9% over the same period. In absolute terms, buy recommendations increased by 586 to 5,938, while hold calls declined by 63 to 1,477 and sell recommendations fell by 88 to 1,118.
Indian equities are entering a durable, earnings-led phase that could deliver low-teen Nifty returns over the next 12 months, according to Neeraj Gaurh of Anand Rathi AMC. With FY27 earnings expected to grow 11-12%, he sees the market compounding broadly in line with profits rather than relying on further valuation expansion. The optimism is supported by stable crude prices and global yields, which could provide additional upside. The June-quarter earnings season has begun, with analysts closely tracking results as they come in for more insights on earnings momentum.
Life insurance recorded one of the sharpest increases in analyst conviction, with buy calls across nine stocks increasing to 214 from 169, lifting their share to 93% from 82%. Hotels remained another Street favourite, with their buy share increasing to 90.8% from 85.9%, while the sell ratio fell to 0.8% from 3.5%. Healthcare facilities received 87% buy calls out of 162 recommendations, compared with 83% at the end of December. Real estate also gained favour, with buy recommendations increasing to 152 from 143 and the sector's buy share rising to 84.4% from 82.2%. Insurers, hotels, healthcare, real estate and asset managers saw the biggest improvement in sentiment, with analysts citing long-term structural growth and attractive valuations.
The bullishness was evident at the company level, with SBI Life Insurance, Max Financial Services, DLF, Kalpataru Projects International, Aadhar Housing Finance and Leela Palaces Hotels & Resorts receiving only buy calls with no hold or sell recommendations. Asset managers recorded a particularly strong increase in conviction, with their buy share rising to 81.9% from 71.3%, while auto-parts manufacturers saw their buy share increase to 81.1% from 71.3%. Banks registered a more moderate improvement, with their buy share increasing to 74.1% from 70.3%. For portfolio construction, Anand Rathi AMC recommends three overweight sectors: private banks for credit-growth-plus-funding-relief combination, manufacturing/capex-linked exporters benefiting from rupee depreciation, and discretionary consumption as the second pillar alongside manufacturing. They advise avoiding real estate until clearer evidence of disciplined capital allocation emerges, and holding the broad IT basket selectively until enterprise-AI share and tech-spend tailwinds are demonstrable.
Downgrade risk is concentrated in IT Services (sluggish growth, guidance cuts, delayed discretionary spend), Airlines (fuel cost and geopolitical pressure), General Insurance (claims inflation, competitive intensity), and parts of Oil & Gas/OMCs (marketing margin and LPG under-recovery concerns). The recent rally in IT stocks has revived hopes that the worst may be over, but valuations still need to adequately capture weak discretionary technology spending and AI-related disruption. Three factors would change the current positioning: a sustained move in crude above $90 that stops looking like a geopolitical one-off, a genuine rise in developed-market bond yields on persistent inflation, or clear evidence of the global tech-reset reallocating capital from the US into Asia including India. According to Pratyush Pandey of AARE Consulting, the optimism reflects improving earnings visibility, domestic demand and favourable structural trends rather than merely short-term momentum.
