Nifty Target 28,000 by 2026: Monarch Networth Forecasts Bullish Growth
Brokerage firm Monarch Networth Capital has projected a significant rally for the Indian equity markets, forecasting the Nifty to reach the 27,000–28,000 range by calendar year 2026. This optimistic outlook is underpinned by a robust recovery in corporate earnings, sustained capital expenditure, and a favorable interest rate environment.
Drivers of the Bullish Nifty Outlook
According to Monarch Networth, India’s structural growth narrative remains resilient despite recent market volatility and sustained selling by Foreign Institutional Investors (FIIs). The brokerage believes the recent corrections in large-cap sectors have been excessive relative to underlying fundamentals.
A key driver for this growth is the massive surge in private sector capital expenditure. Gaurav Bhandari, CEO of Monarch Networth Capital, noted that corporate capex for the top 500 listed non-financial companies has nearly doubled to approximately ₹10 lakh crore compared to pre-pandemic levels. Furthermore, the brokerage estimates Nifty earnings per share (EPS) will reach 1,251 for FY27 and climb to 1,443 by FY28, providing a strong fundamental cushion for higher valuations.
Sectoral Leaders and Midcap Potential
Monarch Networth expects the next major leg of the market rally to be led by the Banking, Telecom, and Technology sectors. These sectors have recently underperformed due to FII outflows but are poised for a recovery as corporate balance sheets strengthen.
The brokerage is also increasingly bullish on the midcap and smallcap segments. Following an 18-month period of valuation correction and earnings adjustment, the risk-reward profile has improved significantly. Monarch projects the Nifty Midcap 150 index to reach approximately 25,595 and the Nifty Smallcap 250 index to hit roughly 19,640. The anticipated rate-cut cycle is expected to act as a major catalyst, reducing financing costs and boosting operating leverage for smaller companies.
Top Stock Picks for Investors
To capitalize on this projected growth, Monarch Networth has identified three specific stocks with strong growth catalysts:
- State Bank of India (SBI): The brokerage views SBI as an attractive play due to its strong asset quality and healthy loan growth. Despite maintaining profitability metrics comparable to top private-sector banks, SBI continues to trade at a valuation discount, offering significant value-unlocking potential through its subsidiaries.
- HFCL: Positive on its earnings turnaround and expanding order book, HFCL is expected to benefit from long-term structural themes including 5G rollout, data center expansion, and increased demand for fiber.
- Hindustan Copper: As India’s only vertically integrated copper producer, the state-run miner is positioned to benefit from rising domestic demand and its "Vision 2030" expansion strategy.
Key Takeaways
- Bullish Nifty Forecast: Monarch Networth expects Nifty to hit the 27,000–28,000 mark by 2026, driven by an estimated EPS of 1,443 by FY28.
- Capex-Led Growth: India Inc's resilience is highlighted by a surge in corporate capex, which has reached nearly ₹10 lakh crore for the top 500 non-financial companies.
- Sectoral Focus: While Banking, Telecom, and IT are expected to lead the large-cap recovery, the easing interest rate cycle provides a strong tailwind for Midcap and Smallcap indices.