Name: JPMorgans base case for Indias Nifty 50: 30,000 by end-2026
Uploaded: 2025-12-15T08:51:33.745Z
Duration: 4 min 2 s
Description: Rajiv Batra, head of Asia equity strategy and co-head of global EM equity at JPMorgan, explains why JPM is overweight on Indian equities. Batra highlights earnings recovery and potential double-digit growth in the upcoming quarters.

Rajiv Batra, head of Asia equity strategy and co-head of global EM equity at JPMorgan, explains why JPM is overweight on Indian equities. Batra highlights earnings recovery and potential double-digit growth in the upcoming quarters.

Mumbai

JPMorgan analysts have set a base case target of 30,000 for India's Nifty 50 index by the end of 2026, supported by a recovery in corporate earnings and broad-based growth across sectors. Recent quarters have shown early double-digit earnings growth, particularly among mid-cap companies, driven by policy easing and reduced borrowing costs.

The bull case scenario, which would require a trade deal between India and the United States, could push the Nifty 50 even higher. While mid caps are expected to continue outperforming due to favorable conditions, small caps may face challenges due to high valuations and weaker earnings.

JPMorgan's base case for India's Nifty 50: 30,000 by end-2026

I think before we start with the bull case, which is almost a 33,000 for Nifty and a Goldilocks kind of scenario, it's important to go what's there in the base case. And the most important part of the base case is the worst on earnings downgrade cycle is behind us. We saw some signs of it during the September quarter result where we got close to 9% bottom line growth overall from MSCI India, surprising to most of the sell side over there. Now we are moving into a cycle where next 4 to 6 quarter you will be getting early double digit kind of an earning growth number and potentially even a surprise like ongoing quarter. And that leads to you towards almost 14 to 15% upside on a base case. In a bull case, you require a trade deal. And that's where the re-rating will click in. And with 15% earning growth plus close to around 14 to 15% re-rating, you get up to the bull case. But bull case require a trade deal between India and US. So base case at 33,000 at the moment, right? Base case 30,000. 30,000 for the base case. Okay. I stand corrected there. Again, this is underpinned by an earnings recovery and you're not the first one in the market to actually talk about why we're seeing that. Based on what we've seen with regards to the last couple of quarters, what do you think has been driving what some say is the earnings upside surprise with regards to Indian earnings right now, Rajiv? Definitely, I'd say once bitten twice shy, but you have been bitten five times. Like past five quarters, there was an anticipation. Now we are out of it. But that didn't happen. Due to which we can see the sell side estimate going into like this quarter or previous quarter over next year are quite anemic and low. So that's easily sets a very low bar for you to beat as such. And beyond that, historically we have seen whenever the twin policy is in easing, is in action, growth is always an outcome that will follow up. This time around, maybe it's coming with a quarter or two kind of a lag, but we believe twin policy is leading to a higher domestic demand, is leading to improvement in earnings. And remember, earnings improvement is not just led by one or two sector only. We are seeing it will be a broad based sectoral growth, particularly that are catering or serving towards the domestic demand. Okay. Now some have actually also pointed out that there's also the interesting and perhaps exciting trend that perhaps we're seeing earnings with the mid caps actually outpacing that of the large caps. Do you think that this is a trend? This indeed is a trend that's worth watching in 2026 when it comes to India. And do you think that, and if so, what do you think might be driving perhaps optimism with regards to this particular segment of the Indian market? So what's the key segment of this easing cycle? It's a rate cut. So we have seen close to around 100 and 125 basis point of a rate cut in this cycle that is reducing the borrowing cost. So if you will look at a leverage, the most amount of a leverage life with my mid caps corporates over there. So if you are changing the leverage pattern, like if you are reducing the borrowing cost, which is as a one variable beyond the raw material cost, which is getting lower, that is where they are giving you a surprise. And past two consecutive quarter, we got 25% plus kind of an earning growth from mid sector, mid size corporates over there. So expect that to continue in the coming quarter also. And we are style agnostic, we believe, be it the large cap, be it the mega cap or even the mid cap, they will tend to do well. Small cap, there will be some struggle because they are not giving you earnings, whereas valuations are very high in small cap. So is it more like the input costs coming down, the cost of doing business coming down, which means that the margins and theoretically earnings also getting that sustained upside that seems to be surprising even the folks at JP Morgan, for instance. So last two quarter, yes, definitely margins have been a clear driver for mid cap corporates and cost of production, be it on the raw materials or interest was the dynamic. But going forward, we expect the top line should also improve, even if we are moving from 7.7% nominal growth or 8% nominal growth this year towards 9, 9.5 next year, that still give us a decent headroom for revenue growth, which usually track your nominal GDP growth of the country.

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