Emkay Global Financial Services has reiterated a positive outlook for Indian equities, projecting a Nifty target of 29,000 by March 2027. This optimism comes despite the ongoing conflict in West Asia and high crude oil prices, which are raising concerns about immediate market conditions.
The brokerage noted that the Strait of Hormuz has been closed for eleven weeks due to escalating tensions that began in early April, leading to Brent crude prices rising between $105 and $110 per barrel. This situation has created an under-recovery of ₹14 per litre for oil marketing companies. A recent government-mandated price increase of ₹3 per litre addresses only 20 percent of this gap, suggesting additional hikes may be necessary unless oil prices decline.
Emkay cautioned that a prolonged energy crisis could potentially drive the Nifty down to 21,000, approximately 12.4 percent below its five-year average price-to-earnings ratio. However, the firm views any such downturn as temporary and a possible opportunity for investors seeking entry points.
In terms of corporate earnings, the fourth quarter of FY26 has commenced on a stable note, with 46 percent of reporting companies exceeding earnings estimates and 29 percent falling short. The earnings per share (EPS) estimate for FY27 stands at ₹1,230, suggesting a growth rate of about 13 percent, only a marginal decline of 1.6 percent since the end of March. Emkay anticipates a more robust recovery for FY28, forecasting an EPS growth of 14.4 percent.
Domestic economic fundamentals remain generally favorable. The Reserve Bank of India (RBI) has reduced interest rates by 125 basis points since February 2025, while system liquidity is at a comfortable level of 1.6 percent of net demand and time liabilities. Recent reductions in Goods and Services Tax (GST) and income tax cuts have stimulated consumer spending. The automotive sector, particularly in two-wheelers and passenger vehicles, has seen a rebound due to these supportive measures.
Emkay maintains an overweight position in the Discretionary, Materials, Industrials, and Real Estate sectors, while adopting an underweight stance in Financials, Energy, Healthcare, Staples, Telecom, and Technology. The firm highlighted commodity inflation as a significant challenge, warning that auto original equipment manufacturers (OEMs) may need to implement price increases of 4 to 5 percent to counter rising input costs in the first quarter of FY27.
Published on May 19, 2026.
