Brokerage firm Nomura has set a Nifty 50 target of 29,300 for the end of 2026, implying a potential upside of 12% from Monday's closing level, according to a note issued on Tuesday.
Four Pillars of Confidence for Indian Equities:
Nomura cited four key factors supporting its positive outlook:
- A Calmer World: Improved geopolitical and global macro stability.
- Cyclical Recovery: A rebound in economic and earnings growth.
- Supportive Policy: Government policies focused on growth, self-reliance, and addressing structural issues.
- Moderation in Valuations: Relative valuation premiums have normalized toward long-term averages.
View on Flows and Foreign Investment:
The brokerage noted that resilient domestic flows, coupled with high valuations, have crowded out Foreign Institutional Investors (FIIs) recently. However, it expects FII interest to improve "in case there is a moderation in the global rally and AI trade," as the valuation premium is now in line with historical averages.
Key Downside Risks:
Nomura highlighted several risks to its outlook, including:
- An unsettled global geopolitical, economic, and technological landscape.
- A rise in the risk premium.
- A substantial global slowdown.
- A flare-up in commodity prices.
Nomura's Top Stock Picks for the Period:
The brokerage's highlighted picks include:
- ICICI Bank, Axis Bank
- Infosys, Bajaj Finance
- Mahindra & Mahindra, Titan
- UltraTech Cement, CG Power
- Dr. Reddy's Laboratories, Ashok Leyland
- Dixon Technologies, Godrej Consumer Products
- Sona BLW, Eclerx
- Aditya Birla Real Estate, Medplus