Major global brokerages, including Goldman Sachs, JP Morgan and HSBC, have turned more optimistic about Indian equities — citing improved corporate earnings, easing valuations, and a favorable domestic macro backdrop.
Why the Optimism
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Earnings appear to be turning around: According to HSBC, around 69 % of companies either met or beat estimates in the latest quarter; sales grew ~6% YoY and net profits rose 13%.
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Many brokerages believe that the long period of earnings downgrades is over. Projections for FY26–FY27 now show modest upgrades, reducing downside risk.
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Valuation gap narrowing: India’s relative premium to broader Asia has compressed — for example, Goldman Sachs noted that India’s equity market premium over Asia has come down from a peak of 85–90% to around 45%, making valuations more palatable for global investors.
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Supportive policy & macro backdrop: Rate cuts, easier liquidity, and regulatory reforms have improved the growth environment. Coupled with good corporate governance and domestic demand revival, this improves the odds for a sustained equity up-cycle.
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Foreign flows show signs of re-entry: After a period of outflows and under-performance relative to global peers, foreign institutional investors (FIIs) are reportedly turning net buyers again a sign of renewed confidence in India’s medium-term outlook.
As a result:
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Goldman Sachs has upgraded India back to “Overweight,” with a target for the Nifty 50 at 29,000 by end-2026.
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JP Morgan has also raised its base-case Nifty50 target to 30,000 over a similar horizon.
What It Means for Investors, Clients & Your Advisory Approach
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Equity positioning outlook improves: For long-term investors, India’s equity market may be entering a “catch-up/re-rating” phase sectors with strong domestic demand (consumer, financials, consumption, infrastructure) are likely to benefit the most.
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Balanced-risk perspective: With valuations more reasonable and earnings visibility improving, the risk-reward profile for Indian equities now appears more attractive than in recent years though global macro risks remain.
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Importance of selective investing: Rather than broad bets, selective exposure to sectors expected to benefit from earnings recovery, policy support, and domestic demand seems prudent.
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Monitoring foreign flows and global context: Given that part of the rebound depends on return of FII flows and global investor sentiment, continued vigilance on global macro trends, foreign capital movements and India’s relative attractiveness remains important.