Nifty Target 28,000 by 2026: Monarch Networth Outlines Growth Path
Brokerage firm Monarch Networth Capital has issued a bullish outlook for the Indian equity markets, forecasting that the Nifty index could reach the 27,000–28,000 range by calendar year 2026. This optimistic projection is anchored by a projected recovery in corporate earnings and a robust expansion in private sector capital expenditure.
Drivers of the Bullish Nifty Forecast
Monarch Networth believes India's structural growth story remains resilient despite recent market volatility and sustained selling by Foreign Institutional Investors (FIIs). The brokerage views the recent correction in large-cap sectors as excessive when measured against underlying fundamentals. To support its valuation, the firm estimates Nifty earnings per share (EPS) will rise to 1,251 for FY27 and further to 1,443 for FY28.
A primary driver for this growth is the massive surge in corporate capex. Gaurav Bhandari, CEO of Monarch Networth Capital, noted that capex for the top 500 listed non-financial companies has nearly doubled to approximately Rs 10 lakh crore compared to pre-pandemic levels. This, combined with structural reforms like GST, RERA, and the Production-Linked Incentive (PLI) scheme, provides a strong foundation for long-term market gains.
Sectoral Outlook: Banking, Telecom, and IT to Lead
The brokerage expects the next leg of the bull run to be spearheaded by sectors that have recently underperformed. Specifically, banking, telecom, and a gradual recovery in large-cap IT stocks are expected to drive the index upward.
Furthermore, Monarch is constructive on the midcap and smallcap segments. Following an 18-month period of valuation correction and earnings adjustment, the risk-reward profile has improved. The firm projects the Nifty Midcap 150 index to reach 25,595 and the Nifty Smallcap 250 index to climb to approximately 19,640. The anticipated rate-cut cycle is expected to act as a catalyst, reducing financing costs and boosting operating leverage for these smaller companies.
Top Stock Picks for Investors
Monarch Networth has identified three specific stocks that offer compelling opportunities based on their unique growth drivers:
- State Bank of India (SBI): The brokerage highlights SBI as an attractive play due to its strong asset quality and healthy loan growth. Despite profitability levels comparable to leading private banks, SBI continues to trade at a valuation discount, offering significant value-unlocking potential through its subsidiaries.
- HFCL: Positioned as a beneficiary of long-term technological shifts, HFCL is expected to thrive due to its strong order book and growing export business. Key tailwinds include the 5G rollout, data center expansion, and rising demand for fiber.
- Hindustan Copper: As India’s only vertically integrated copper producer, this state-run miner is poised to benefit from rising domestic demand and its "Vision 2030" expansion strategy.
Key Takeaways
- Nifty Projections: Monarch Networth forecasts Nifty to hit 27,000–28,000 by 2026, supported by rising EPS estimates for FY27 and FY28.
- Capex Surge: India Inc.'s resilience is backed by a doubling of capex in the top 500 non-financial companies to nearly Rs 10 lakh crore.
- Strategic Sectors: Banking, Telecom, and IT are expected to lead the recovery, while a rate-cut cycle may drive significant gains in midcap and smallcap indices.