- JPMorgan lowers year-end Nifty 50 target to 27,000 from 30,000 earlier
- Base case implies 14% upside; bull case targets 30,000, bear case 20,500
- Q4 earnings growth for Nifty firms expected at 4% year-on-year
Multinational brokerage JPMorgan has lowered its year-end base target for the benchmark Nifty 50 index to 27,000 from 30,000 earlier, implying an upside potential of nearly 14% from the current level. The bull case projects the blue-chip index at 30,000 (26% upside) and the bear case at 20,500 (downside of 14%).
The index has corrected 9.7% from its all-time high hit on Jan. 2 in the midst of multiple headwinds including the Iran war, trade uncertainties and impact of artificial intelligence on software exporters. JPMorgan's base case Nifty target implies a rise of 2.6% over that peak.
Analysts led by Rajiv Batra trimmed their growth expectations for India Inc's March-quarter earnings, citing macro headwinds and rising cost pressures, while downgrading the consumer staples sector to Neutral.
In its Q4FY26 earnings preview, the brokerage said earnings for the Nifty pack are expected to grow 4% year-on-year, while companies under the JPMorgan coverage universe are likely to post a relatively stronger 10% YoY growth. Operating margins are projected to expand by 62 basis points for the Nifty and 56 basis points for the JPMorgan universe.
Earnings momentum is expected to be driven by materials, retail, hospitals and automobiles, while oil and gas, insurance and electronics manufacturing services (EMS) are likely to weigh on overall performance.
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JPMorgan noted that the earnings season is unfolding against a challenging backdrop marked by Middle East conflict spillovers, elevated crude oil prices, a weaker rupee and continued foreign institutional investor (FII) outflows. While revenues remain healthy and are tracking around 8% growth, margin pressures are expected to intensify into Q1FY27 as input costs rise and imported inflation picks up.
Reflecting these risks, the brokerage has cut India's FY27 real GDP growth forecast by 50 basis points and trimmed FY27 earnings estimates by around 2-10% across sectors. It has also reduced MSCI India earnings growth forecasts by 2% and 1% to 11% and 13% for CY26 and CY27, respectively.
Despite the near-term pressures, the brokerage continues to prefer high-growth domestic cyclicals, citing better earnings visibility relative to defensives.
"Beyond the immediate hurdles, India's structural growth story remains intact, in our view, driven by ongoing policy support, financial stability, comprehensive regulatory reforms, multiple bilateral/regional trade deals, rising capex into strategic sectors and a manufacturing boost. Our preferred positioning leans heavily towards high-growth domestic cyclicals," the note said.
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