Nomura Lifts Nifty Forecast to 26,140, Cautions on Corporate Earnings Risks

Nomura has raised its Nifty target for March 2026, citing stabilised domestic macro conditions. The international brokerage firm has lifted the target to 26,140 from the earlier level of 24,970.

While India Inc. did witness a slowdown in earnings growth in Q4, there were more hits than misses. Plus, the Indian stock market has remained relatively resilient in the recent past despite heightened global uncertainties playing in the background alongside cuts in earning estimates.

"We think positive domestic macros, as reflected in the significant fall in yields and the relatively lower beta of Indian equities underpinned by consistent domestic flows, are supporting market valuation. The performance of global equity markets despite trade-related uncertainties implies that equity risk premiums remain low," Nomura stated in its recent report.

Nomura pointed out that the earnings growth for FY25F has moderated to 8%, with consensus estimates projecting a recovery to 12% and 15% in FY26F and FY27F, respectively. However, the brokerage firm believes that further earnings downgrade of 4–8% is likely for FY27F.

Even the corporate earnings-to-GDP ratio is nearing its peak, making significant outperformance relative to nominal GDP growth unlikely in the near term.

"Potential earnings headwinds include: weak investment cycle, fiscal consolidation by the government, reduced household financial savings, and weak export demand. These to an extent could be negated by lower oil prices, inflation and interest rates," the report added.

Market Movement

So far this year, benchmark indices— Sensex and Nifty—witnessed a surge of over 3%. While markets have remained largely resilient even as uncertainties prevail on the geopolitical front, analysts are not expecting any positive surprises in the market momentum, at least in the near term.

Since the past few weeks, markets have remained largely range-bound. "During a consolidation phase, where the market moves within a range, buy on dips is the ideal strategy. And this strategy is working well now. With a lot of uncertainty in geopolitics, tariffs and trade the market will continue to remain volatile. Therefore, investors may persist with the strategy of buying on dips," said VK Vijayakumar, chief investment strategist, Geojit Investments.