Goldman Sachs Bullish on Indian Equities, Sets Nifty Target at 29,000 by 2026
Global investment bank Goldman Sachs has upgraded Indian equities to “Overweight” with a Nifty target of 29,000 by end-2026, projecting a 14% upside from current levels.
Key Takeaways
- Nifty target set at 29,000 by 2026 (14% potential upside)
- Rating upgraded from previous October 2024 downgrade
- Expected earnings growth: 10% in 2025 to 14% in 2026
- Key sectors: Financials, consumer durables, defence, TMT, oil marketing
Growth Revival and Policy Support
In its report “Leaning In as Growth Revives; Raising India back to Overweight,” Goldman Sachs anticipates renewed growth momentum driven by supportive monetary and fiscal policies. The Reserve Bank of India’s easing measures, including rate cuts and improved liquidity, along with GST reductions are expected to bolster domestic demand over the next two years.
Valuation Recovery and Foreign Interest
After significant foreign portfolio outflows of $30 billion caused Indian equities to underperform MSCI EM by 25 percentage points over the past year, Goldman Sachs now sees a turnaround. “We now see a case for Indian equities to perform better over the coming year,” the report noted, citing cooled valuations and improved foreign risk appetite.
Earnings Momentum and Sector Outlook
Corporate earnings for the September quarter exceeded expectations, leading to upgrades in select sectors. The bank forecasts MSCI India profits to rise from 10% in 2025 to 14% in 2026, supported by a stronger nominal growth environment.
Consumption Boost Expected
Multiple factors are likely to support mass consumption, including low food inflation, robust agricultural cycles, GST rate reductions, impending state elections, and potential 8th Pay Commission wage increases. These should raise demand and profits in consumer-related industries.
