Nifty at 29,000? Emkay sees 2026 as India’s comeback year
India is likely to reverse a year of sharp underperformance versus global peers. Earnings momentum is improving from one of the weakest to one of the strongest, Emkay Global said.
- Jan 8, 2026,
- Updated Jan 8, 2026 11:12 AM IST
Emkay Global in its India Strategy 2026 outlook note said it expects the Nifty to reach 29,000 by December 2026, implying potential returns of 11.8 per cent. The domestc brokerage said 2026 should be India’s comeback year, supported by a cyclical recovery in consumption and a broad-based earnings revival. It expects Nifty FY27 earnings growth to bounce back to 14 per cent, which should improve domestic and foreign fund flows after a weak first quarter of 2026. It highlighted automobile, internet and new-age businesses, and small and midcap lenders as the key themes for the year.
The brokerage said India is likely to reverse a year of sharp underperformance versus global peers. Earnings momentum is improving from one of the weakest to one of the strongest, while the valuation premium has thinned from 10 per cent to 6 per cent versus the Bloomberg World Index since June 2025. Reform momentum is expected to accelerate in 2026, aided by a relatively light election calendar. India is entering a macro growth recovery, in contrast to a slowdown in western markets, and the fading global AI trade could benefit India due to its limited exposure.
Emkay Global said near-term risks remain. Continued rupee weakness and RBI interventions could strain domestic liquidity. Combined with fiscal pressures, this may affect monetary transmission across the yield curve and equity flows, both foreign and domestic. It expects continued market volatility and sporadic sharp sell-offs, with a worst-case Nifty range of 24,500–25,000 in 1QCY26, which it considers a temporary dip and a potential entry point.
It said growth revival in 2926 is likely to be supported by 2025 stimuli, including income tax cuts, monetary easing, and GST 2.0. Consumption, particularly urban and discretionary spending, should lead the recovery, supported by central government investment and corporate capex. This should drive FY27 Nifty EPS growth to 14 per cent, led by Financials, Discretionary, and Technology sectors. The share of companies with EPS growth above 25 per cent is expected to rise from 34 per cent in FY26 to 47 per cent in FY27E.
Emkay Global added that SMID stocks are likely to outperform, driven by higher earnings growth and lower valuation premiums. Smaller companies across staples, financials, and technology are delivering stronger growth, offering opportunities for alpha, though elevated valuations require careful stock selection.
Emkay Global in its India Strategy 2026 outlook note said it expects the Nifty to reach 29,000 by December 2026, implying potential returns of 11.8 per cent. The domestc brokerage said 2026 should be India’s comeback year, supported by a cyclical recovery in consumption and a broad-based earnings revival. It expects Nifty FY27 earnings growth to bounce back to 14 per cent, which should improve domestic and foreign fund flows after a weak first quarter of 2026. It highlighted automobile, internet and new-age businesses, and small and midcap lenders as the key themes for the year.
The brokerage said India is likely to reverse a year of sharp underperformance versus global peers. Earnings momentum is improving from one of the weakest to one of the strongest, while the valuation premium has thinned from 10 per cent to 6 per cent versus the Bloomberg World Index since June 2025. Reform momentum is expected to accelerate in 2026, aided by a relatively light election calendar. India is entering a macro growth recovery, in contrast to a slowdown in western markets, and the fading global AI trade could benefit India due to its limited exposure.
Emkay Global said near-term risks remain. Continued rupee weakness and RBI interventions could strain domestic liquidity. Combined with fiscal pressures, this may affect monetary transmission across the yield curve and equity flows, both foreign and domestic. It expects continued market volatility and sporadic sharp sell-offs, with a worst-case Nifty range of 24,500–25,000 in 1QCY26, which it considers a temporary dip and a potential entry point.
It said growth revival in 2926 is likely to be supported by 2025 stimuli, including income tax cuts, monetary easing, and GST 2.0. Consumption, particularly urban and discretionary spending, should lead the recovery, supported by central government investment and corporate capex. This should drive FY27 Nifty EPS growth to 14 per cent, led by Financials, Discretionary, and Technology sectors. The share of companies with EPS growth above 25 per cent is expected to rise from 34 per cent in FY26 to 47 per cent in FY27E.
Emkay Global added that SMID stocks are likely to outperform, driven by higher earnings growth and lower valuation premiums. Smaller companies across staples, financials, and technology are delivering stronger growth, offering opportunities for alpha, though elevated valuations require careful stock selection.