Early signs of recovery are visible in Indian markets, with the Nifty expected to hit 27,958 in the next 12 months, according to a report by PL Capital. The report outlines a bullish scenario with a 20x forward earnings multiple pointing towards a potential rise to 30,497, while a conservative bear case sets a target of 26,486 for Nifty.
PL Capital forecasts an EPS growth of 3.8%, with a strong medium-term earnings trajectory expected at a 16.3% CAGR over FY26–28. Corporate performance has shown resilience, with year-on-year sales, EBITDA, and profit after tax growing by 9.9%, 16.4%, and 16.7% respectively.
The report emphasizes that India’s growth story is at a crucial juncture, with policy clarity, significant trade agreements, and sustained infrastructure development laying the groundwork for the next phase of expansion. Despite recent earnings adjustments, structural drivers remain robust, signaling a shift towards renewed optimism in the market.
According to Amnish Aggarwal, Director Research, Institutional Equities at PL Capital, India is transitioning from a cyclical recovery phase to a more robust growth trajectory. As capital formation accelerates and productivity improvements take effect, Indian equities are poised to embark on a multi-year compounding cycle.
The report highlights India’s advancements in trade diplomacy, particularly citing the India-EU Free Trade Agreement, as a key driver for the upcoming growth phase. Sectors like textiles, apparel, marine products, leather goods, gems and jewelry, chemicals, machinery, and electrical equipment are expected to witness significant benefits from these developments.
Industries such as banks, diversified financials, capital goods, and engineering companies are well-positioned to capitalize on the normalization of credit growth, stable asset quality, and the infrastructure and defense sectors’ growth prospects.
