Stock Market Outlook: Experts see nifty 50 at 26k peak despite unlikely recovery in the near-term

India Inc.’s Q4 FY25 Earnings Season Was Broadly in Line with Street Expectations, Reflecting Subdued Growth and Offering Limited Optimism for a Near-Term Recovery. Companies in the BSE-500 Index Posted A 8.7% Year-On-Year (Yoy) Increase in Net Profit, While The Nifty 50 Companies reported a more modest 3.7% growth in network.

The fourth Quarter was marked by modest operating performance account sector and mutated commentary from compani managements. This sugges that a strong revival in creed, consumption, or investment demand is unlikely in the immediative future.

According to Kotak Institutional Equites, The Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) of NIFTY 50 Companies Grew by 9.2% Yoy in Q4. For the full fiscal year 2025, net income and ebitda of the nifty 50 rose by 6.4% and 4.5%, respectively.

Valuations remain in neutral territory

The nifty 50 is currently trading at 20.2 times one-year forward price-to-earnings ratio (per), slightly below its five-yar average of 21.7x. This positions the market in a relatively neutral Valuation Zone.

“Markets could see a Phase of Consolidation in the Near Term, As the Percentage of BSE200 Stocks Trading Above +1 Standard Deviation from their long-term average has increased significant significant-from 10.6% to 30.3%, 10.3% to 30.3%,” Said Seshadri Sen, Head of Research and Strategist at Emkay Global Financial Services.

He added that while Near-Term Global and Geopolitical Concerns have larGely played out, a constructive trade agreement with the Us Cold Offer Support. Emkay Global has mained its nifty 50 target of 26,000 for March 31, 2026, based on a long-term average per of 20x on fy27 estimated EPS of 1,304.

Meanwhile, Kotak Institutional Equites Highlighted The Indian Equity Market’s Current Dilemma – Caught Between High Valuations, Domestic Growth Challenges, and Global Macroeconomic Headwinds Oone Aone Aone Aone Side, and the hopes of an economic recovery in economic and earnings growth on the other.

“We observe stretched valuations Across Most Sector and Stocks – Barring Bfsi and A Few Exceptions – Against a backdrop of weak Volume Growth and Increasing Disrupting DISRUPTION RISKS,” Kotak SAID in A NOTE.

Market Outlook

Seshadri Sen remain constructive on the broader markets. While Concerns Around Reciprocal Tariffs Have Largely Eased, He Expects Investor Attention to Shift Toward The Progress on Bilateral Trade Agreements.

“We Forecast Nifty EPS Growth of Around 12–13% in fy26. Green shoots of recovery in discretionary consumption may emerge as the impact of monetary Easing believers more protinesde. V-shaped rally following the tariff pause, and we expect the beta raly to continue.

He views current nifty 50 levels as fundamentally justified, with scope for further UPSIDE as the Earnings Cycle Begins to Infect. Supportive Monetary Policy – Characterized by Rate Cuts, Liquidity Support, and Relaxed Lending Norms – Provides Additional Comfort.

Emkay Global MainTains its overweight stance on the discretionary, technology, and telecom sector, reflecting confidence in their growth potential amid an evolving macroeconomic landscape.

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