Nifty to reach 29,120 by Dec 2026; earnings set to grow 8.2% in FY26E: Kotak Securities’ CEO Shripal Shah

Indian equity markets remained largely range-bound in calendar year 2025 amid global headwinds and sustained selling by foreign institutional investors, but analysts are optimistic about the next wave of growth.

“Indiaʼs financial landscape is entering a transformative phase and an era of resilience never seen before. Despite global headwinds, India remains one of the fastest-growing major economies in recent times,” said Shripal Shah, MD & CEO of Kotak Securities.

Shah expects the Nifty50 to scale 29,120 by December 2026, supported by steady corporate earnings, easing macro pressures, and a resilient domestic economy. Despite a 17% correction from its September 2024 peak, the Nifty rebounded to deliver a new all-time high in 2025, underscoring the strength of domestic equities amid global uncertainty, he said.

“Our market outlook sets a base-case Nifty target of 29,120 by December 2026, at an estimated PE of 20.0x on FY28E EPS of ₹1,456. Domestic fundamentals remain strong, and we are optimistic about the next wave of growth. Long-term investors should focus on quality stocks and add on dips. Risks include geopolitical tensions, trade protectionism, and currency fluctuations.”

He noted that near-term growth will be supported by GST rationalisation, potential rate cuts, benign inflation, and a favourable monsoon, while long-term momentum could come from infrastructure spending and sustained capital expenditure. Valuations, he added, have moderated and now offer a healthier setup for 2026.

In its Market Outlook 2026, the brokerage projects Nifty earnings to grow 8.2% in FY26E, before accelerating sharply to 17.6% in FY27E, aided by improving demand, policy stability, and a pickup in investment activity.

The report notes that while foreign portfolio investors (FPIs) registered higher outflows through the year, domestic institutional investors (DIIs) absorbed the selling, helping maintain market stability.

On commodities, the brokerage highlighted the extreme volatility of 2025, with gold surging over 60% to $4,380 and silver doubling year-to-date. Tight supply conditions and rising demand from clean energy and technology are likely to keep precious metals elevated, though with persistent volatility.

India’s investor ecosystem is also undergoing rapid transformation. Active demat accounts have crossed 21 crore, with investors under 30 making up 40% of the base. Rising participation from smaller towns and women investors is reshaping market behaviour, Kotak noted.

Shah added that the domestic growth story remains compelling and supports a constructive view for 2026. “India’s financial landscape is entering a transformative phase. Despite global headwinds, optimism for equities remains intact, backed by improving earnings and strong policy measures,” he said.

While the outlook remains positive, the brokerage flagged risks from geopolitical tensions, trade protectionism, and currency fluctuations. It expects CY25 to conclude on a positive note with moderate growth and macro stability, advising long-term investors to focus on quality stocks and accumulate on dips.

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