More Stories

Informist, Monday, Jul. 13, 2026

 

MUMBAI – Though the renewed hostilities in West Asia are likely to fuel near-term volatility, global investment banking company Goldman Sachs expects the Nifty 50 to recover towards its June 2027 target of 26500 points. This would mean an upside of 10% from the benchmark index's current level. The index has fallen 9% in the first six months of 2026.

 

"India's outlook has improved in recent weeks, amid lower commodity prices, stabilized currency, resilient domestic growth, healthy earnings expectations in 2Q (Jul-Sept), and potential recovery in select domestic pockets," Goldman Sachs said in its strategy report. The investment banking firm sees enough room for foreign flows to return to the Indian equity market, with ultra-light foreign positioning, according to the report. While the continued earnings downgrade cycle and a less attractive growth-valuation mix in the Indian market when compared with other markets remain major concerns for investors, "improving visibility on domestic recovery will act as a catalyst for investors to start pricing in the anticipated recovery in advance", Goldman Sachs said.

 

In the first half of 2026, de-rating in valuations led to negative returns in the market on fears of an economic slowdown while "growth" outperformed "value" amid weak earnings. "Looking ahead, we expect a rotation from 'growth' to 'value' as investors look for reasonably valued pockets in anticipation of a recovery," the investor bank said. Most sold and reasonably-valued pockets, like large-caps and banks, are expected to gain the most in the second half of the financial year 2026-27 (Apr-Mar), as foreign outflows are expected to turn their course during that period.

 

Goldman Sachs sees valuations as the most reasonable for financial stocks when compared to the rest of the market. An absolute forward price-to-earnings multiple of 16 times, which is lower than the multiple of 20 times for the broad MSCI India index, is one of the key reasons attributed to the reasonable valuations for the sector. The growth-adjusted price-to-earnings ratio, which is just under one time, and the sector trading at the lower end of its historical range are the other major reasons for reasonable valuations for the sector.

 

India's current earnings-per-share downgrade cycle is on track to be the weakest in recent history after being hit by the longest supply-driven rally in crude oil in the past 15 years and a sharp depreciation in currency, according to the report. "Consensus has cut MSCI India's CY26e (calendar year 2026 estimated) earnings growth by 4pp (percentage points) to 12%, coming closer towards our full-year estimate of 10%," the investment banking company said. "The cuts could further deepen in the next couple of months, per historical precedents, as analysts bake in further impact of higher oil prices and weaker currency on corporate profits with a lag."

 

Goldman Sachs remained bullish on defence and energy stocks while sectorally it raised utilities to overweight and remained overweight on banks, energy refiners, technology, media, telecommunications, and defence.  End

 

Reported by Arundathi A R

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.