Indian stock markets are showing early signs of recovery, with the Nifty index potentially reaching 27,958 points within the next 12 months under a base case scenario. This projection comes from a detailed report released by PL Capital on Wednesday.
The analysis outlines three scenarios: a bullish outlook where Nifty could climb to 30,497 based on a 20x forward earnings multiple, a base case at 27,958 reflecting normal market conditions, and a bearish scenario settling at 26,486 amid weakness.
PL Capital anticipates a modest 3.8% rise in earnings per share (EPS), with medium-term earnings growth projected at a robust 16.3% CAGR through fiscal years 2026-28. Corporate performance remains solid, boasting annual growth rates of 9.9% in sales, 16.4% in EBITDA, and 16.7% in profit after tax.
The report emphasizes India’s growth story entering a decisive phase, fueled by policy clarity, historic trade agreements, and sustained infrastructure development. ‘This is laying the foundation for the next expansion phase,’ it states.
Long-term market consolidation appears to be giving way to renewed optimism. Despite shifts in recent earnings analyses, structural factors remain firmly in place.
Amanish Agarwal, Director of Institutional Equity Research at PL Capital, remarked, ‘India is transitioning from cyclical recovery to structurally strong growth.’ He added that accelerating capital formation and productivity gains signal the start of a multi-year compounding growth cycle for Indian equities.
Highlighting the India-EU Free Trade Agreement, the report notes rapid progress in trade diplomacy as a key catalyst for the next growth cycle. Labor-intensive sectors like textiles, apparel, seafood, leather, gems and jewelry, chemicals, machinery, and electrical equipment stand to gain significantly.
Demand surge is expected in seafood exports, leather goods, and gems—critical job creators. Meanwhile, capital goods and engineering firms are poised to capitalize on booms in infrastructure and defense sectors.