Nifty 50 outlook: Domestic brokerage firm Axis Securities believes the Indian stock market benchmark, Nifty 50, has the potential to hit 26,800 by March 2026 on reduced volatility and a soft landing in the US market.
The 26,800 Nifty target of Axis Securities factors in the Goldilocks scenario, or a favourable economic condition.
“Backed by expectations of political stability, policy continuity, fiscal prudence, an improving private capex cycle, rural revival, and a soft landing in the US market, Nifty 50 earnings are likely to grow at 17-18 per cent over FY23-27. This would augur well for capital inflows into emerging markets (EMs) and increase the market multiples in the domestic market,” the brokerage firm said in a report.
Nifty’s target: The base, bull, and bear case scenarios
The base case, or the most likely or expected target of Nifty 50, is 25,500.
“In our base case, we revise our March 2026 Nifty target to 25,500 by valuing it at 20 times on March 2027 earnings. Based on the expectations of the earnings upgrade starting from Q3FY26 onwards, we see upside risk to our target,” said Axis Securities.
In the bull case, Axis Securities values Nifty at 21 times, translating into a March 2026 target of 26,800.
“Our bull case assumption is based on the Goldilocks scenario, which assumes an overall reduction in volatility and a successful soft landing in the US market. Private Capex is expected to receive a much-needed boost in the upcoming years, with the expectation of policy continuity,” said Axis.
In the bear case, Axis values Nifty at 17 times, arriving at a March 2026 target of 21,600.
“We assume the market will trade at above-average valuations, led by the likelihood of a policy shift in the Trump regime. The direction of currency, oil prices, and global trade developments will likely put pressure on export-oriented growth in the remaining part of FY26,” said Axis.
The brokerage firm underscored that due to Trump tariffs, the outlook for global growth has turned hazy.
“These developments will likely bring down the market multiple in the near term. However, based on the recent developments, the chances of this scenario playing out have reduced significantly,” Axis said.
The strong outlook of the Indian economy amid global challenges remains a key factor indicating that the domestic market is poised for gains in the medium to long term.
“Despite external risks, India’s domestic growth trajectory remains intact, with key macroeconomic factors supporting a stronger FY26 compared to FY25. Both the RBI and the government are providing support by front-loading all the fiscal and monetary measures to the Indian economy that are pro-growth in nature,” Axis noted.
Indian stock market: Ripe for a rebound?
Mixed earnings season and US tariff-related uncertainties dragged the Indian stock market lower in July and August. The Nifty 50 fell 3 per cent in July, snapping a four-month winning streak. The index further declined by 1.4 per cent in August.
“The pullback was led by mixed trends in the recently concluded earnings season. While companies delivered the results as per the market expectations, they failed to build solid forward-looking guidance, leading to consolidation in the market,” Axis Securities observed.
The brokerage firm underscored that earnings downgrades have been limited by far.
“74 per cent of Nifty companies have either beaten the earnings expectations or are in line with them, while 86 per cent of the Nifty universe are either in line or beat the revenue expectations. Upgrades are expected in the second half due to the base effect, expectation of consumption pick-up, bounce back in the BFSI earnings, and support coming from the export-oriented themes,” said the brokerage firm.
Axis further said that while a 50 per cent US tariff on India was a surprise move, it could be negotiated to lower levels.
Axis pointed out that most significant events are now behind us, with the majority of negative concerns regarding earnings already factored into the price.
The market will closely monitor developments in the US government’s policies and negotiations, further rate cuts by the US Fed in 2025, and the direction of currency and oil prices in the remaining part of 2025, said Axis Securities.
Stocks to buy
While the medium—to long-term outlook for the overall market remains positive, Axis Securities expects the domestic market to experience volatility in the short run.
So, the brokerage firm recommends using the current dips in a phased manner and building a position with an investment horizon of 12-18 months in high-quality companies with high earnings visibility.
Axis Securities has selected 15 top picks across segments—nine stocks from the large-cap space and three each from the mid- and small-cap segments.
Large-cap stocks to buy
HDFC Bank (target price: ₹1,150), SBI (target price: ₹1,025), Bharti Airtel (target price: ₹2,300), Bajaj Finance (target price: ₹1,100), Varun Beverages (target price: ₹590), Shriram Finance (target price: ₹750), Avenue Supermarts (DMart) (target price: ₹5,280), Lupin (target price: ₹2,400), and Max Healthcare Institute (target price: ₹1,450).
Mid-cap stocks to buy
Hero MotoCorp (target price: ₹5,900), Prestige Estates Projects (target price: ₹2,000), and APL Apollo Tubes (target price: ₹1,950).
Small-cap stocks to buy
Kirloskar Brothers (target price: ₹2,330), Sansera Engineering (target price: ₹1,500), and Kalpataru Projects International (target price: ₹1,470).
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the broking firm, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
