Nifty50 set to see bumper 2026? Goldman Sachs raises Indian equities to ‘overweight’; Nifty target set at 29,000 for 2026-end

Expressing confidence in the Indian stock markets, Goldman Sachs has raised its rating to ‘overweight’ and set a 29,000 level target for Nifty50 by end-2026. The latest Goldman Sachs report suggests a potential increase of approximately 14% from Friday’s close of 25,492.The firm indicates that share markets could show improved performance following this year’s underperformance, which has been the most substantial in twenty years.Indian equities showed a modest increase (3% in dollar terms) this year during one of the strongest periods for emerging markets (30%), according to the brokerage’s analysis.Their recommended buy-rated portfolio includes Apollo Hospitals, KEI Industries, PTC Industries, MakeMyTrip, UNO Minda, Hitachi Energy India, Bharti Airtel, TBO Tek, Data Patterns (India), Suven Pharmaceuticals, and C.E. Info Systems according to an ET report.“With a year-long earnings downgrade cycle stabilising in the past few months and showing signs of recovery, coupled with our expectations of policy-driven easing financial conditions going forward, we now see a case for Indian equities to perform better over the coming year and moderate its significant underperformance vs. the region,” stated Goldman in a weekend client communication.India’s share valuations continue to remain elevated despite the underperformance.“While India’s high valuation has been the most common investor concern and at 23 times (Price to Earnings ratio) 12-month forward valuations, India remains the most expensive market in EM, we expect moderate de-rating of 5% in our base case and 9% in our bear-case scenario over the next two years,” the firm stated.The PE valuation premium for India compared to the Asian region has decreased from its 85-90% peak over the past two years to 45% at present, approaching the 20-year average of 35%, as per Goldman’s assessment.“History suggests at current levels of PE premium, India has modestly outperformed the Asian region over the next 6-12 months,” according to the brokerage’s statement.