JPMorgan's Head of India Equity Research Sanjay Mookim joins Karan Aggarwal, CIO at Ametra PMS, in predicting Nifty 50 could reach 27,000 by March 2027. According to CNBC TV18, Mookim's assessment comes as Nifty currently trades around 24,200, down nearly 8% from its all-time high of 26,370. At present, Nifty 50 valuations at 21 times on a consolidated basis can be justified with an EPS growth rate of 15% or above, but given trends in Q1 and negative base effects in the auto, banking, and metals sectors from Q3, the EPS growth rate of 10%-11% seems a reasonable expectation for FY27. Mookim believes the value trade is probably on in Indian equities better than it has been for the last 3 years, with valuations, especially among large caps, having eased significantly. The Nifty 50 forward P/E has moderated from 21.3x to its historical long-term average of 18.3x, making current valuations well-justified following the recent market reset.
Jay Thakkar, Head of Derivatives and Quant Research at ICICI Securities, sees an upside breakout in Indian equities, led by Bank Nifty, supported by short covering, strong market breadth and expected positive MSCI rebalancing flows. According to ET Now, Thakkar noted that the Bank Nifty could lead the breakout, while geopolitical tensions and elevated crude oil prices remain key risks for global markets. The Nifty has been trading in the 24,000-24,600 range for quite some time, while the Bank Nifty has been moving between 57,000 and 58,500 levels. Thakkar emphasized that FIIs had increased their index shorts by almost 60,000 contracts, while the banking sector had also witnessed an increase in shorts, which could pave the way for an upside breakout through short covering. Mookim remains positive on financials, pharma, healthcare, defence and select power stocks, while preferring consumer discretionary over expensive staples.
As reported by Mint, Q1FY27 earnings came in ahead of street estimates, reflecting resilience despite volatile macro backdrop. Topline growth came in at a multi-quarter high at 18% year-on-year (YoY), while adjusted profit after tax (PAT) growth stood at 15% YoY. Within the index, financials outperformed, reporting 19% YoY growth in adjusted PAT, compared to 12% YoY growth for non-financials. At aggregate level, all listed companies reported 16% YoY PAT growth in Q1FY27, while excluding oil marketing companies (OMCs), listed companies reported 25% YoY PAT growth in Q1FY27, with earnings growth stronger at 35% YoY when excluding Nifty 50 and OMCs. However, broader market earnings showed single-digit top-line growth (nearly 6% YoY) and flat-to-modest PAT growth (nearly 3%–4% YoY), reflecting the slowest pace of profit expansion since the post-pandemic recovery phase. Mookim noted that India's local economic backdrop is supportive, with Q1FY27 numbers coming in materially better than expected, though commodity inflation continues to squeeze margins.
According to CNBC TV18, the bigger concern is the global backdrop, with elevated US bond yields limiting emerging-market flows. Mookim pointed to 10-year bond yields at these levels, saying investors have an attractive alternative in relatively safe dollar assets, which could weigh on EM asset performance. High US bond yields could limit the pace of gains and keep foreign flows subdued, despite renewed interest from long-only foreign investors. Mookim does not expect foreign inflows to surge immediately, noting that volatility in North Asian technology stocks and more reasonable valuations in Indian large caps are encouraging investors to look at India again. He also highlighted the large pipeline of equity issuance in India, with IPOs, QIPs and block deals absorbing significant liquidity, estimating that new equity supply is currently larger than monthly inflows into domestic mutual funds. While this can weigh on liquidity in the short term, he sees the development as healthy over the medium term as it broadens the market and creates more investment opportunities. On monetary policy, JPMorgan's base case is for the RBI to keep rates unchanged for now, despite growing market speculation about potential rate hikes.
According to Mint, Pandey believes near-term earnings may see some moderation in Q2FY27, primarily due to lagged impact of elevated commodity prices, though on full-year basis the impact appears manageable. Nifty 50 earnings expected to grow nearly 16% CAGR over FY26–FY28E, with the earnings cycle remaining healthy and temporary margin pressures unlikely to derail the broader growth trajectory. Aggarwal highlights that in an ideal scenario, 14%-15% earning growth was largely expected in Q1 FY27, with credit growth hovering round 18% and record automobile sales, but commodity inflation is squeezing margins. Mookim expects artificial intelligence (AI) related capital spending to remain strong in the near term, with 2027 capex potentially exceeding 2026 levels, though the eventual return on that investment remains an important question for markets. Mookim noted that India remains a structural growth market over the next three to five years, but its relative growth advantage is currently less pronounced, with I doubt, I will not hold my breath for a flood of FII money coming in the next quarter or so.
