Nifty To Hit 29,300 In 2026, Says Nomura As It Lists Top 20 Stock Picks - Details Inside

Nomura Optimistic on Indian Equities, Sets 2026 Nifty Target of 29,300

Nomura, a prominent brokerage firm, expects Indian equities to close 2025 on a more stable footing than at the start of the year, driven by a combination of calmer global conditions, domestic growth recovery, and easing valuation concerns.

Key Takeaways

• Nomura's India Strategy Outlook: The brokerage sets an end-2026 Nifty target of 29,300, implying a potential 12% return from current levels.
• Valuation Expectations: Nomura expects Indian markets to trade in a band of 20–22 times forward earnings, assuming low risk premia.
• Risks to Outlook: The global policy and technology environment remains unpredictable, and potential risks include a rise in risk premium, sharp slowdown in global growth, or spike in commodity prices.
• Recommendations: Nomura advises a selective approach, favoring areas with subdued sentiment but improving fundamentals, such as commercial vehicles, pharmaceuticals, IT services, and non-bank lenders.

Nomura's India Strategy Outlook in Detail

Nomura's India Strategy outlook is based on 21 times December 2027 forecast earnings, adjusted for a 3% downside to current consensus estimates. The brokerage expects domestic equity inflows to remain resilient, accounting for 13% of gross financial savings in fiscal 2025.

Primary market activity has also kept pace, but foreign investor participation has been lukewarm. Nomura believes that the alignment of India's valuation premium with long-term averages could support a gradual return of foreign flows in 2026, particularly if the global technology-led rally moderates.

Risks to Nomura's Outlook

The global policy and technology environment remains unpredictable, and any rise in risk premium, sharp slowdown in global growth, or spike in commodity prices could cloud the Indian equity narrative.

Nomura also notes that corporate earnings are likely to recover meaningfully in financial year 2026, helped by a low base and a rebound in cyclical and commodity-linked sectors such as chemicals, oil and gas, cement, and metals.

Corporate Earnings Recovery

Consensus forecasts for financial year 2026–2028 have been trimmed by 4%-8% over the past year. While risks to fiscal 2026 earnings appear limited due to improving domestic demand and policy-led consumption support, Nomura sees some downside risk to FY27–28 estimates if corporate capex remains sluggish and the trade deficit widens.

Recommendations

Nomura advises investors to adopt a selective approach, avoiding richly valued, narrative-driven stocks where stretched expectations raise the risk of disappointment.

Instead, it recommends favoring areas where sentiment is subdued but fundamentals may improve, such as commercial vehicles, pharmaceuticals, IT services, and non-bank lenders. The brokerage also encourages investors to increase exposure to underperforming exporters and to remain cautious in areas with heavy government intervention.