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Informist, Monday, Apr. 21, 2025

--Nomura sets Nifty 50 March 2026 target at 24970 points 

--Nomura raises Nifty 50 multiple to 19.5 times FY27 EPS from 18.5 earlier 

--Nomura sees Nifty 50 trading in range of 17-20 times 1-yr forward earnings 

--Nomura: Expect market return between (-)9% to 7% over one year 

MUMBAI – Nomura Global Markets Research has set its Nifty 50 target for March 2026 at 24970 points, implying a rise of 3.5% from the current levels. This was higher than the brokerage's 2025 December-end target of 23784 points, which the brokerage had given in January.

Its new target is based on a valuation of 19.5 times the 2026-27 (Apr-Mar) Nifty 50 earnings per share estimate of INR 1,280. Nomura said it reached the valuation after factoring in a 5% cut to current consensus estimates for FY26-FY27.  

"We expect earnings growth, at best, to be in line with nominal GDP growth in the near term, as the earnings-to-GDP ratio is already at elevated levels," the brokerage firm wrote in its report released Monday. Nomura expects a 5.8% real GDP growth in FY26 as compared to the Street estimate of nearly 6.5%, it said. The brokerage added that assuming a valuation range of 17-20 times, it expects a market return of (-)9% to 7% over the next one year.

Earlier this year in January, Nomura had set the December-end target for Nifty 50 at 23784 points, implying a valuation of 18.5 times the estimated earnings for the twelve months to December 2026. The fair valuation range is 17-20 times, Nomura has then said, estimating a return of (-)8% to 9% over 2025. At 1126 IST, the Nifty 50 was up 1.2% at 24125.55 points. The index has gained over 2% this year.

Private sector investment and capital expenditure are likely to remain weak in the near term, Nomura said, adding that government capital expenditure is also showing signs of slowdown. Meanwhile, the outlook on consumption is a mixed bag. The brokerage said there is uneven recovery in rural India, with a positive momentum in the farming sector but non-farm segments remains weak. Urban consumption is still poor, Nomura said.

Nomura has a positive outlook on sectors such as automobiles, consumer, oil and gas, telecommunications, power, internet, and real estate. The brokerage is selective in sectors such as financials, fast-moving consumer goods, and healthcare services. It has a cautious stance towards sectors such as infrastructure, cement, capital goods or defence, information technology services, and metals.

The brokerage expects cuts in earnings estimates for sectors such as oil, gas, metals, cement, chemicals, information technology. It pointed out the guidance for FY26 has been weaker than the brokerage's expectations so far. Having said that, the brokerage expects earnings estimate of sectors non-banking finance companies, healthcare, infrastructure, and real estate may not see cuts. "We continue to recommend a bottom-up approach and would avoid stocks with very high valuation multiples as any flare up in risk premium could present significant risk to this segment," Nomura said.

Commenting on the direct impact of US tariffs, Nomura said it is rather limited for India. The brokerage now awaits update on sector-specific tariffs on semiconductors and pharmaceuticals. "We think in the near term, companies will continue to supply from India and impact of tariff increases is likely to be passed on to the customers," the brokerage wrote in its report. Further, India may benefit from supply chain relocation that is likely to gain momentum, with policies in place to boost domestic manufacturing, it added.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Shakshi Jain

Edited by Deepshikha Bhardwaj

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