Citi has raised its target for the Nifty to 26,800 for June 2027, from 26,000 for March 2027, as the brokerage sees better-than-expected Q1 earnings and a stable outlook supporting Indian equities. According to reports from Citi, the revision reflects improved market conditions and positive earnings momentum across sectors. The Nifty target of 26,800 is based on an 18 times one-year forward price-to-earnings multiple, with the brokerage noting that the underlying numbers support this constructive stance. Citi's India strategy team has also added Axis Bank to its top large-cap picks, reflecting confidence in the banking sector's performance and the broader financial services outlook.
Citi's data shows that BSE 100 EBITDA and PAT grew 6% and 9% year-on-year respectively, both well above previous estimates, while top-line growth excluding the energy sector came in at 14% year-on-year, also ahead of expectations. As reported by Citi, the earnings performance was described as healthy across sectors, supporting the positive outlook for Indian equities. The brokerage noted that details looked healthy and broad-based across sectors, contributing to the optimistic assessment. However, Citi flags margin pressure in the Consumer, Industrial and Financial sectors as a concern, even as the overall outlook stays relatively positive. The firm has maintained its FY27 and FY28 earnings estimates unchanged since July, demonstrating confidence in the sustained earnings trajectory.
Citi maintains an Overweight stance on financials, telecom, healthcare and utilities, while remaining Underweight on IT services, consumer staples and metals. According to Citi's sector allocation, the brokerage has added Axis Bank to its top large-cap picks, reflecting confidence in the banking sector's performance. The sectoral strategy reflects specific expectations about growth potential across different industry segments, with the focus shifting to demand resilience once the benefits of recent GST cuts recede. Citi has left its FY27 and FY28 earnings estimates unchanged since July, maintaining its constructive stance despite the recent market volatility.
Citi's estimate changes point to a stronger earnings outlook for several healthcare and financial names. As reported by Citi, Laurus Labs has the biggest FY28 estimate upgrade at 41%, followed by Info Edge at 26%, Divi's Laboratories at 15% and Gland Pharma at 16%. The brokerage also raised its FY28 estimate for Granules India by 278% and Nuvoco Vistas by 33%. Citi has left its FY27 and FY28 earnings estimates unchanged since July, maintaining its constructive stance despite the recent market volatility.
Citi expects earnings to remain resilient as the impact of GST cuts feeds through demand, with upcoming public-sector wage hikes and continued government spending as potential supports for consumption. According to Citi's analysis, the brokerage identified GST tailwinds, wage hikes and credit growth as key positive drivers for equities. However, the firm remains watchful of AI productivity impact and elevated crude oil costs as main risks to monitor going forward. The firm remains constructive as the Nifty trades near its long-term average multiples, with the brokerage pointing to these drivers as key supports for its constructive stance.
