Nomura Raises Nifty Target to 26,140 by March 2026; Lists 17 High-Conviction Stock Picks

Global brokerage house Nomura has revised its Nifty 50 target to 26,140 by March 2026, citing India’s robust macroeconomic outlook, strong corporate earnings, and favorable policy environment. The new target implies an upside of nearly 14% from the current Nifty levels around 22,950.

Alongside the upgraded index forecast, Nomura has released a list of 17 high-conviction stock picks across multiple sectors, reflecting optimism in India’s multi-year growth trajectory.

Macro Factors Behind the Upgrade

Nomura’s upward revision is driven by several tailwinds shaping India's equity story:

• Earnings visibility: Indian Inc. is witnessing a broad-based earnings recovery, with FY26 earnings expected to grow by 14–16%.

• Macroeconomic resilience: Stable inflation, sustained GDP growth (~7%), and a favorable interest rate outlook continue to support domestic fundamentals.

• Global capital flows: India remains a preferred destination for foreign investors amid China’s slowdown and global diversification trends.

“India’s economic momentum remains intact, with tailwinds from infrastructure push, consumption revival, and digital acceleration. We see further re-rating potential across select sectors,” said Rahul Bajoria, Chief India Economist at Nomura.

Sectoral Outlook: Positive on Financials, Industrials, and Tech

Nomura’s note is particularly bullish on domestic cyclicals and structural compounders. Financials remain at the core of the outlook, while capital goods, manufacturing, and digital enablers are seen as multi-year winners.

Key themes driving the sector view:

• Private capex uptick: Supporting capital goods and infrastructure plays

• Healthy credit growth: Boosting banking and NBFC sectors

• Global digital demand: Benefiting top-tier IT firms and platform players

• PLI and Make-in-India tailwinds: Driving earnings for manufacturing and auto firms

Nomura’s 17 High-Conviction Stock Picks

Nomura has identified the following 17 stocks as top bets for the medium-term based on earnings strength, valuation comfort, and sector leadership:

1. ICICI Bank

2. Axis Bank

3. HDFC Bank

4. State Bank of India (SBI)

5. Larsen & Toubro (L&T)

6. Bharat Electronics Ltd (BEL)

7. NTPC

8. Coal India

9. Maruti Suzuki

10. Mahindra & Mahindra

11. Tata Motors

12. Infosys

13. HCL Technologies

14. Dixon Technologies

15. UltraTech Cement

16. ITC

17. DMart (Avenue Supermarts)

“Our stock picks represent a mix of quality compounders, policy beneficiaries, and domestic growth proxies. These companies have strong balance sheets and scalable business models,” the report noted.

Valuation Rationale and Earnings Forecast

At the revised Nifty target of 26,140, Nomura assumes a forward PE multiple of 18.5x on FY26E earnings. The firm expects Nifty EPS to grow from ₹1,430 in FY25E to ₹1,630 by FY26E, driven by improved margins and topline growth across sectors.

While valuations are slightly elevated compared to historical averages, Nomura believes they are justified by:

• Long-term earnings visibility

• Political stability post-2024 elections

• Improving return ratios and deleveraging in many corporate balance sheets

Risks to Watch

Despite the bullish outlook, Nomura flagged a few downside risks that could temper returns:

• Delay in US Fed rate cuts or higher-for-longer interest rate scenario

• Global geopolitical tensions (Middle East, Taiwan Strait)

• Volatility around the upcoming state elections and any policy reversal

• Weak monsoon impacting rural demand

“We remain watchful of global macro headwinds. However, domestic fundamentals remain strong enough to offset external shocks over the medium term,” said Tanvi Mehra, Equity Strategist at Nomura India.

Investor Outlook: A Case for Selective Participation

For investors, Nomura’s revised outlook signals an extended runway for Indian equities but with a greater emphasis on stock selection and thematic investing. Rather than broad index exposure, the firm encourages focusing on companies benefiting from structural reforms, technology integration, and consumption tailwinds.

Tactical Allocation Advice:

• Overweight: Private banks, industrials, autos, digital tech, manufacturing

• Neutral: FMCG, pharma

• Underweight: Global commodities, export-dependent midcaps

“The next leg of returns will be driven not by liquidity but by earnings. Investors should tilt portfolios toward high-conviction, fundamentally strong businesses,” advised Mehra.

Conclusion

Nomura’s bullish revision underscores growing confidence in India’s growth story, driven by earnings resilience and supportive macro trends. While global headwinds remain, the structural case for Indian equities appears stronger than ever—especially when paired with disciplined stock selection.