Overview
- Analysts expect 2026 gains to be driven more by an earnings recovery than by multiple expansion, with progress paced rather than rapid.
- Policy support remained a key backstop in 2025 as the RBI cut the repo rate by a cumulative 125 bps to 5.25% and reduced CRR by 100 bps, injecting roughly Rs 2.5 lakh crore of liquidity.
- Foreign investors were heavy net sellers with about Rs 2.31 lakh crore of outflows in 2025, while domestic SIP contributions of roughly Rs 3.2 lakh crore helped stabilise flows.
- Valuations stay elevated with Nifty’s one‑year forward P/E near 21.5x and midcap and smallcap indices at higher premiums, reinforcing the case for a large‑cap bias and selective stock picking.
- Geojit forecasts Nifty at 29,150 by December 2026, implying about 12% upside, while cautioning on high valuations, global rate paths, trade frictions and the potential for consolidation.