India Strategy – Emerging headwinds to curtail broad based rally
Published on 01 Sep 2026
NIFTY has been resilient in past few weeks as markets seem to shrug off the geopolitical uncertainty, deficient monsoons and disruption of global supply chain. 1Q27 corporate performance (PL coverage) shows 15.5% sales growth and 17% PAT growth Ex-Oil & Gas sector, which has been highest growth since 4Q24. NIFTY EEPS has seen a change of 1.2/0.4% for FY27/28 with 15.8% EPS CAGR over FY26-28 with FY27/28EPS of Rs1349/1537. NIFTY is currently trading at 17.3x 1-year forward EPS, which is at 11.7% discount to 15-year average PE of 19.6x. We value NIFTY at 10% discount to 15-year average PE of 17.6x with FY28 EPS of 1537 and arrive at 12-month target of 27123 (27019 earlier). We expect markets to remain volatile although medium term downside seems limited given -2% returns in last 12 months.
