InCred Equities turns bullish on Indian stock market; raises Nifty 50 Dec 2026 target to 28,433
InCred Equities, in its latest note, turned bullish on the Indian stock market as it raised the Nifty 50 December 2026 target to 28,433 while upgrading its rating to ‘Overweight’ from ‘Neutral.’ The brokerage cited a mix of tailwinds, including easing valuations, a recovery in earnings, and early signs of a revival in domestic consumption, which it believes could drive the Indian stock market after its recent underperformance.
Taking a more optimistic view, the brokerage revised its bull-case probability to 40% and reduced the bear-case probability to 10% for FY26F. It pegged the Nifty 50’s bull-case target at 30,304, implying an upside of 19% if the Indian economy rebounds faster than expected.
In recent months, both the RBI and the government have undertaken several policy initiatives, the latest being GST rate cuts, aimed at reviving domestic consumption, which had weighed on growth in recent quarters. The impact of these measures is already becoming visible in improved urban consumer sentiment, which the brokerage believes should lead to a turnaround in the personal consumption segment in the second half of the current fiscal year.
The RBI announced 22 new measures in its recent monetary policy to strengthen the banking sector, improve credit flow, enhance ease of doing business, and simplify forex rules, developments that are expected to support growth in the medium term.
Consequently, expectations of a revival in private consumption, which accounts for nearly 60% of India’s gross domestic product (GDP), and growth in the manufacturing sector have led to a 30-basis-point upgrade in Bloomberg consensus estimates for India’s FY26F GDP growth to 6.7%.
Valuations adjust to more comfort levels
On the valuation front, the brokerage noted that the Nifty 50 stabilized in September 2025 after two months of marginal declines. It added that the near double-digit cut in Nifty 50 Bloomberg consensus EPS estimates for CY26F–27F may soon bottom out, aided by government policy actions.
Comparatively, it pointed out that the India MSCI P/E valuation premium versus Asia Pacific (ex-Japan) has now eased to its 10-year mean, providing valuation comfort.
It also expects GST reforms to drive a cyclical recovery in auto sector demand, leading to an upgrade in the sector’s rating to ‘Overweight’ from ‘Neutral’ in September 2025.
Nifty 50 companies’ earnings expected to rise 7% in September quarter
For the September 2025 quarter, Bloomberg consensus estimates project Nifty 50 companies’ EPS to rise by 7% YoY to ₹275. Excluding the financial sector, Nifty 50 EBITDA is expected to increase by 4% YoY, driven by double-digit growth in the telecom, materials, and industrial sectors, while a decline is likely in the consumer discretionary space.
In recent months, the Nifty 50 Bloomberg consensus FY26F EPS has seen a 0.8% cut, which is relatively minor compared to previous quarters.
InCred noted that downgrades in the financial and industrial sectors have been largely offset by upgrades in the telecom and consumer discretionary segments.
Nifty 50 recovers over 5% in October
Rebounding sharply in October, the Nifty 50 has surged 5.01%, marking its best monthly performance since March 2025. The rally was largely driven by banking, consumer durable, and FMCG stocks as investors appeared pleased with the release of the September quarter results, with select companies’ numbers coming above the Street, providing a much-needed boost to Dalal Street.
A reversal in overseas sentiment also supported the index, which crossed the 25,800 mark for the first time to hit a new one-year peak of 25,843, bringing it within 1.65% of its all-time high of 26,277, reached in September 2024.
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