Nifty50 to hit 29,300 by end-2026? Nomura lists top 20 stock picks

Nomura on Nifty 2026 target: Global brokerage Nomura has projected a bullish outlook for the Indian equity markets in 2026, setting its 2026-end Nifty target at 29,300, a potential 12 per cent gain from current levels. The target is based on 21 times December 2027 earnings forecasts, factoring in a 3 per cent potential downside to current consensus earnings estimates.

 

Nomura expects Indian markets to trade in the range of 20-22x one-year forward earnings, assuming risk premia remain low. The brokerage had already shed concerns over valuation in May 2025, when markets stabilised following global tariff tensions.

Calmer macros and cyclical recovery to aid markets

 

According to Saion Mukherjee of Nomura, the positive outlook is underpinned by a combination of calmer geopolitics, stable macroeconomic indicators, and a cyclical recovery in both economic growth and corporate earnings. Policies aimed at supporting domestic growth, self-reliance, and structural reforms are expected to further reinforce market sentiment.

 

Make smarter market moves with The Smart Investor. Daily insights on buzzing stocks and actionable information to guide your investment decisions delivered to your inbox.

Subscribe

 

“Domestic inflows into equities have remained resilient, accounting for 13 per cent of gross financial savings in FY25, while primary issuances kept pace with these inflows at 78 per cent,” the brokerage noted. Strong domestic flows and elevated valuations have limited the role of foreign institutional investors (FIIs) in recent months. While Nomura does not expect a surge in FII inflows in 2026, incremental improvement is possible, particularly if global equity rallies moderate.  ALSO READ | Motilal Oswal raises Nifty EPS, expects steady earnings momentum ahead

Recovery in corporate earnings, some downward revisions expected

 

Corporate earnings are expected to rebound in FY26, with low double-digit growth driven by commodity sectors such as chemicals, oil & gas, cement, and metals. Over the past year, consensus earnings estimates for FY26-28 have moderated by 8 per cent, 6 per cent, and 4 per cent, respectively. Current forecasts assume earnings growth of 14.6 per cent for FY27 and 13.2 per cent for FY28.

 

Nomura suggests that downside risk to FY26 earnings is limited, supported by cyclical recovery and consumption stimulus. However, low to mid-single-digit risks remain for FY27-28 if the domestic investment cycle, particularly corporate capex, fails to gain momentum or if the trade deficit remains elevated.

Selective approach recommended amid rich valuations

 

Nomura recommends a selective, bottom-up investment strategy. Investors are advised to avoid narrative-driven, richly valued stocks that carry the risk of ‘narrative fatigue’ or sharp corrections if expectations are not met. Instead, the brokerage favours segments and stocks where expectations are low, but there is room for improvement, including commercial vehicles, pharmaceuticals, IT services, and NBFCs.

 

Nomura also suggests increasing exposure to underperforming exporters and being selective in sectors with major government intervention.  ALSO READ | Brokerages remain bullish on markets for 2026 as Sensex hits new high

Sector outlook, top picks

 

Nomura remains bullish on financials, pharma, IT services, consumer discretionary, real estate, internet, cement, telecom, and manufacturing. It maintains a ‘Neutral’ stance on autos, oil & gas, and metals, while advising caution on consumer staples, infrastructure, capital goods, and healthcare services.

 

The brokerage’s top 20 equity picks include a mix of large-caps and high-potential mid-caps:

 

Top 20 Picks: ICICI Bank, Infosys, Bajaj Finance, Maruti Suzuki, Axis Bank, Titan Company, UltraTech Cement, GCPL, LG Electronics India, CG Power, Dr. Reddy’s Laboratories, Alembic Pharma, Dixon Technologies, Swiggy, Alkem Laboratories, Mahindra & Mahindra Financial Services, Sonata Software, ECL Finance, Aditya Birla Retail, MedPlus Health Services.

 

Nomura’s note underscores that the Indian equity market, despite recent underperformance relative to global peers, now trades at a valuation premium aligned with historical averages, supported by strong domestic flows and structural growth potential. 

 

Investors seeking exposure to India in 2026 are advised to remain selective, focusing on sectors with cyclical recovery and underappreciated earnings potential. 

Disclaimer: Nifty target and outlook has been suggested by Nomura. Views expressed are their own.