Bold And Bullish! Behind JPMorgan's Big Nifty Call — Earnings, Tax Cuts And More

The Indian stock market is likely to witness correction in the remainder of the current fiscal, even as volatility dominates the broader sentiment amid US tariff jitters. Among the wide pool of D-Street analysts and brokerages, JPMorgan's top expert has provided a bold, bull case scenario for the market, despite elevated risks.

Investors seek optimism to place their bets in the stock market even as majority of players have adopted cautiousness this year over a prolonged period of pessimism. Speaking to NDTV Profit in an exclusive interview, Rajiv Batra, chief India equity strategist, head of Asia and co-head of EM equity strategy, JPMorgan, said that the first quarter will serve as 'period of transition' for the market, which has not yet priced in its positive factors.

Batra's bold comments come a day after the leading global brokerage released its latest India Equity Strategy report, which provided bullish call for the NSE Nifty 50 benchmark by the end of FY26. JPMorgan expects Nifty to likely hit the critical 30,000-mark in the next six to nine months—its best bull case scenario, driven by long-awaited recovery in earnings by Indian corporates.

Batra told NDTV Profit that he expects earnings growth to be in double digits during the second half of FY26. "Double-digit growth plus policy support makes a strong chance of a bull case for the market. If economic growth comes back, people will be happy to pay at even higher valuations," claimed the JPMorgan expert. Batra said investors search for growth rather than value in the Indian stock market.

"I anticipate that this quarter will serve as a period of transition, from underwhelming earnings to a decent recovery, driven by a low base from last year and resurgence in economic momentum," he said. According to the expert, the market is not pricing double-digit earnings growth number due to pessimism seen in the last four quarters. "Earnings and valuation to drive growth in markets."

According to JPMorgan's report, the expectation of a 30,000 bull case for the Nifty 50 comes on the back of an earnings recovery expectation. In the first quarter of financial year 2026, earnings of Nifty 50 companies and other companies on the investment banker's radar will likely post 7% year-on-year growth.

The first quarter of FY26 will report an improvement in earnings growth due to ongoing recovery in rural demand, tax cuts coming into effect from April onwards, and easing monetary policy regime which has supported liquidity in the system. "If growth makes a comeback, then investors will make a comeback and valuation will not be questioned at all," emphasised Batra.

For the top Nifty 50 companies, JPMorgan expects an aggregate revenue/Ebitda/PAT to grow 4%/7%/7% YoY. Among sectors, the double-digit earnings growth is likely to be driven by healthcare, insurance, building materials and capital goods; while auto, defence, staples and gas utilities will drag.

According to the global brokerage, information technology and banks will likely report muted growth in the first quarter. "We have downgraded Indian IT to 'underweight' post last earnings season. The investment environment is not too conducive for the Indian IT space." Batra's preferred sectoral picks include banks, consumer durables, and hospitals.

Frontline indices Sensex and Nifty 50 posted second straight weekly loss, weighed by uncertainty over a potential US trade deal and weak earnings from IT major Tata Consultancy Services Ltd. The Nifty 50 fell 1.22% to 25,149.85 points this week, while the BSE Sensex lost 1.12% to 82,500.47. Nifty IT was the biggest sectoral loser as it fell 3.8% this week due to weak TCS earnings and uncertainty over US President Donald Trump's tariffs.

However, domestic brokerages note that despite facing geopolitical uncertainty and war, the Nifty 50 benchmark has given a 6% return so far. The Indian benchmark has underperformed in calendar year 2025 so far in the emerging market space.