Nifty to Hit 28,000 by 2026: Monarch Networth Predicts Bull Run
Brokerage firm Monarch Networth Capital has issued a bullish outlook for the Indian equity markets, projecting the Nifty to reach the 27,000–28,000 range by calendar year 2026. This optimistic forecast is anchored by a projected recovery in corporate earnings and a robust expansion in private sector capital expenditure.
Drivers of the Nifty Bull Run
Monarch Networth believes India’s structural growth story remains resilient despite recent market volatility and sustained selling by Foreign Institutional Investors (FIIs). The brokerage notes that the recent correction in large-cap sectors appears excessive when measured against underlying fundamentals.
A key pillar of this optimism is the massive surge in corporate capex. Gaurav Bhandari, CEO of Monarch Networth Capital, highlighted that capital expenditure for the top 500 listed non-financial companies has nearly doubled to approximately ₹10 lakh crore compared to pre-pandemic levels. This, combined with supportive reforms like GST, RERA, and the Production-Linked Incentive (PLI) scheme, is expected to fuel long-term growth.
The brokerage provided specific earnings estimates to support its claims, forecasting Nifty Earnings Per Share (EPS) at 1,251 for FY27 and rising to 1,443 for FY28.
Sectoral Outlook: Banking, Telecom, and IT
The next phase of market gains is expected to be led by sectors that have recently underperformed. Monarch Networth identifies banking, telecommunications, and a gradual recovery in large-cap IT stocks as the primary drivers for the benchmark index.
Furthermore, the brokerage is positive 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 expects the Nifty Midcap 150 index to reach around 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 enhancing operating leverage for these smaller companies.
Top Three Stock Picks for Investors
To capitalize on this projected upswing, Monarch Networth has highlighted three specific stocks across different sectors:
- State Bank of India (SBI): The brokerage views SBI as an attractive play due to its strong asset quality and healthy loan growth. Despite profitability metrics 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 play on digital infrastructure, HFCL is expected to benefit from the 5G rollout, data center expansion, and rising fiber demand. The company’s strong order book and growing export business underpin this positive outlook.
- Hindustan Copper: As India's only vertically integrated copper producer, the state-run miner is poised to benefit from rising domestic demand. Its "Vision 2030" strategy and expansion plans make it a strong long-term candidate.
Key Takeaways
- Target Projections: Monarch Networth forecasts Nifty to reach 27,000–28,000 by 2026, supported by an EPS of 1,443 by FY28.
- Capex Growth: Corporate capital expenditure for the top 500 non-financial companies has surged to nearly ₹10 lakh crore.
- Sectoral Winners: Banking, Telecom, and IT are expected to lead the recovery, with midcaps and smallcaps poised to benefit from the easing monetary policy.