Emkay Global has retained its March 2027 Nifty target of 29,000 based on 19.2 times price-to-earnings valuation, according to its latest India Strategy report. The brokerage noted that current market valuations are near long-term averages, with Nifty trading at 19.2 times FY27 price-to-earnings. Emkay emphasized that periods of weakness should be treated as opportunities rather than a change in market direction, stating "Our Mar-27 Nifty tgt of 29,000 at 19.2 PER; Expect normalcy to return soon, any weakness is entry opportunity."
At the portfolio level, Emkay remained overweight on discretionary consumption, materials, industrials and real estate, while staying underweight on financials, energy, healthcare, staples, telecom and technology. The brokerage's discretionary consumption call is linked to domestic support measures including income tax cuts and cumulative Reserve Bank of India rate cuts of 125 basis points since February 2025. Emkay noted that an Iran war resolution would clear path for consumption revival, while the materials sector benefits from expected earnings growth across FY27 and FY28 that the market has not fully priced in.
Emkay identified oil prices and developments around the Strait of Hormuz as key variables to watch in the near term. The brokerage noted that the Strait of Hormuz remained shut for eleven weeks and comprehensive peace negotiations remained elusive. Brent crude moved into the $105 to $110 per barrel range, resulting in under-recoveries of ₹14 per litre. The recent ₹3 per litre increase in fuel prices addressed only 20% of current under-recoveries. Emkay warned that prolonged energy disruption could push Nifty toward 21,000, 12.4% below long-term average on PER, with the correction being transient. The latest developments show 10-year U.S. Treasury yield hit 4.621% while the 30-year breached 5.14%, levels unseen since 2007, as global bond yields spike amid Iran war concerns.
The fourth quarter earnings season has started on a stable footing, with nearly one-fifth of Emkay's coverage universe reporting results so far. 46% of companies beat estimates while 29% missed, according to the brokerage. Nifty earnings per share for FY27 remained at ₹1,230 while implied earnings growth held around 13%. Emkay expressed confidence in FY27/FY28 earnings recovery, stating "Confident on FY27/FY28 earnings recovery; near-term volatility a buying opportunity."
The US Federal Reserve is likely to drop its easing bias at the next FOMC meeting and shift toward a tightening stance through 2026, with a 20% chance of a 25 bps hike in December if the Strait of Hormuz remained closed and energy prices spiked further, according to Elara Securities research report. This stance reflects growing concerns about inflationary pressures and represents a significant shift from current monetary policy. The global bond market turmoil, with UK gilt yields surging to century highs and Japan's bonds hitting all-time records, underscores the broader impact of geopolitical tensions on financial markets worldwide.
