Nifty to Hit 28,000 by 2026: Monarch Networth Predicts Bull Run
Brokerage firm Monarch Networth Capital has released an optimistic outlook for the Indian equity markets, projecting the Nifty to reach the 27,000–28,000 range by calendar year 2026. This bullish stance is predicated on a robust recovery in corporate earnings and a favorable shift in the interest rate environment.
Drivers of the Next Market Leg
According to Monarch Networth, India's structural growth story remains resilient despite recent volatility caused by sustained Foreign Institutional Investor (FII) selling. Gaurav Bhandari, CEO of Monarch Networth Capital, noted that the recent correction in large-cap sectors appears excessive when measured against underlying fundamentals.
The brokerage’s projections are backed by significant earnings estimates, forecasting a Nifty Earnings Per Share (EPS) of 1,251 for FY27 and rising to 1,443 for FY28. Key macroeconomic pillars supporting this growth include:
- Capital Expenditure (Capex): Corporate capex for the top 500 listed non-financial companies has nearly doubled to approximately ₹10 lakh crore compared to pre-pandemic levels.
- Structural Reforms: Long-term benefits from GST, RERA, the PLI scheme, and corporate tax reforms continue to bolster India Inc.
- Monetary Policy: An ongoing rate-cut cycle is expected to act as a catalyst, reducing financing costs and improving operating leverage.
Sectoral Outlook: Banking, Telecom, and IT
Monarch expects the next phase of market gains to be led by sectors that have recently underperformed due to FII outflows. Specifically, banking, telecom, and a gradual recovery in large-cap IT stocks are expected to drive the benchmark index.
Furthermore, the brokerage remains constructive 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 predicts the Nifty Midcap 150 could reach 25,595, while the Nifty Smallcap 250 is targeted to climb to approximately 19,640.
Top Stock Picks for Investors
To capitalize on these emerging themes, Monarch Networth has identified three specific stocks with strong growth potential:
- State Bank of India (SBI): Viewed as a high-value proposition, SBI offers strong asset quality and healthy loan growth. Despite profitability metrics comparable to top private sector banks, it continues to trade at a valuation discount, offering potential value unlocking through its subsidiaries.
- HFCL: The brokerage is bullish on this player due to a significant earnings turnaround and a robust order book. HFCL is well-positioned to benefit from the 5G rollout, data center expansion, and rising demand for fiber.
- Hindustan Copper: As India's only vertically integrated copper producer, the state-run miner is poised to benefit from rising domestic demand and its "Vision 2030" expansion strategy.
Key Takeaways
- Bullish Target: Nifty is projected to reach 27,000–28,000 by 2026, supported by rising EPS forecasts for FY27 and FY28.
- Sectoral Leaders: Banking, Telecom, and IT are expected to lead the recovery, while midcaps and smallcaps benefit from the easing interest rate cycle.
- Strategic Picks: SBI, HFCL, and Hindustan Copper have been identified as top picks based on valuation, order books, and structural demand.