Stock market: Why Nomura upped Nifty target for March 2026

Nomura India in its latest note on Indian stock market said it has raised its March 2026 Nifty target price to 26,140, saying equity valuation is supported by favorable macros at the moment, even as there are risks to corporate earnings. 

The Japanese brokerage said positive domestic macros, as reflected in the significant fall in yields and the relatively lower beta of Indian equities underpinned by consistent domestic flows, are supporting market valuation. 

“The performance of global equity markets despite trade-related uncertainties implies that equity risk premiums remain low. Global equity market valuations have rebounded despite the rise in bond yields. Significant weakness in the global economy due to trade disruptions and policy uncertainties remain a key risk,” Nomura said. 

At present, Nifty is trading at 20.5 times one-year forward earnings, near the high-end of its trading range over the past three years. 

That said, favorable spread between earnings yield and bond yield at – 1.4 per cent – which is at the high end of the range that prevailed over the past four years – is comforting. 

“Against the current macro backdrop, we assess the fair value range for the Nifty at 18-24 times one-year forward earnings, which implies upside/downside of 24 per cent/12 per cent from current levels. Assuming benign risk premium and low yields, we raise the target valuation multiple to 21x (from 19.5x previously),” Nomura India said. 

Based on 21 times on FY27 earnings, it arrived a March 2026 Nifty target of 26,140 against 24,970 earlier, suggesting potential upside of 5.61 per cent from the prevailing levels.

For FY25, earnings growth has slowed to 8 per cent; and consensus estimates suggest earnings growth could recover to 12 per cent/15 per cent in FY26/27F. 

“We think, for FY27F, further earnings cuts of 4-8 per cent are likely. The corporate earnings-to-GDP ratio is close to its peak, and significant outperformance to nominal GDP growth is unlikely in the near term, in our view,” Nomura said. 

Meanwhile, potential earnings headwinds include weak investment cycle, fiscal consolidation by the government, reduced household financial savings, and weak export demand. 

“These to an extent could be negated by lower oil prices, inflation, and interest rates,” Nomura said.