Nifty likely to end at 29,500 by December-end, says BNP Paribas

The note said Nifty earnings estimates have seen sharp cuts over the past year amid weaker-than-expected growth and margin pressure in certain sectors, such as consumer staples and autos

BNP Paribas expects the benchmark Nifty to end the year at 29,500, a gain of 14 per cent from current levels.

 

“We expect 2026 to be a better year for the markets as the government and the central bank have already taken measures to boost the economy, of which we are seeing early positive results,” Kunal Vora, head of India equity research at BNP Paribas, observed in the  India Strategy note.

 

The note said that Nifty earnings estimates have seen sharp cuts over the past year amid weaker than expected growth and margin pressure in certain sectors.

 

“With policy reforms and favourable macro, we have started to see improvement in high-frequency indicators. We have also seen consensus earnings estimates hold up well during the 2QFY26 earnings season. Domestic consumption-oriented sectors, such as private sector banks, autos, and consumer staples, are well poised for strong earnings growth in FY27,” the note said.

 

 

BNP Paribas expects a strong earnings rebound in private sector banks. And an improvement in growth and recovery margins for consumer staples in 2026-2027 (FY27).

 

The note further said strong earnings growth will continue in the telecom sector, helped by tariff hikes.  Nifty is likely to outperform small and midcaps next year.

 

“Despite the outperformance, we find the relative valuations of largecaps more attractive. Nifty midcap and smallcap have underperformed Nifty 50 in 2025, but they are still trading at 40 per cent and 20 per cent  premium vs Nifty 50, which is higher compared to their respective historical averages, and we see better valuation comfort in Nifty 50,” the note said.

  In terms of sectors, the brokerage said it is positive on large private-sector banks, telecoms, passenger vehicles, and consumer staples, which predominantly have largecap stocks.

 

On the headwinds for Indian markets, the note said there is limited room for further policy support from the government and rising equity supply due to FII selling and new supply through initial public offerings, qualified institutional placements, and promoter selling.