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 equity market as it raised the Nifty 50 December 2026 target to 28,433 while upgrading its rating to ‘Overweight’ from ‘Neutral’. The broker cited a mix of headwinds, including easing valuations, a recovery in earnings and early signs of a revival in domestic consumption, which it believes could propel the Indian stock market after its recent underperformance. Taking a more optimistic view, the broker revised its bull case probability to 40% and reduced the bear case probability to 10% for FY26F. This pegged the Nifty 50’s bull-case target at 30,304, implying a 19% rise if the Indian economy recovers faster than expected. In recent months, both the RBI and the government have undertaken various policy initiatives, the latest being GST rate cuts, aimed at reviving domestic consumption, which has dented growth in recent quarters. The impact of these measures is already visible in improved urban consumer sentiment, which the broker believes should lead to a turnaround in the personal consumption segment in the second half of the current financial year. The RBI announced 22 new measures in its recent monetary policy to strengthen the banking sector, improve credit flows, ease of doing business and simplify forex rules, developments expected to support growth in the medium term. As a result, 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 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 broker 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 could materialize soon, aided by government policy actions. Nifty-50 index’s forward P/E valuation is falling below the 10-year average level. Comparatively, it pointed out that the India MSCI P/E valuation premium over Asia Pacific (ex-Japan) has now reduced to its 10-year average, 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 are expected to rise 7% in the September quarter. ₹275. Excluding the financials sector, Nifty 50 EBITDA is expected to increase by 4% y-o-y, driven by double-digit growth in the telecom, materials and industrials 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 were largely offset by upgrades in the telecom and consumer discretionary segments. Nifty 50 recovers over 5% in October The Nifty 50 rebounded sharply in October, rising 5.01%, marking its best monthly performance since March 2025. The rally was largely driven by banking, consumer durables and FMCG stocks, as investors seemed pleased with the release of September quarter results, with corporates posting very good results. Dalal Street. A turnaround in overseas sentiment also supported the index, which breached 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. Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. We advise investors to check with certified experts before making any investment decisions.