Has Goldman Sachs Upgraded India to 'Overweight' with a Nifty Target of 29,000 by 2026?
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Synopsis
Goldman Sachs has raised India's equity rating to 'Overweight', predicting a Nifty target of 29,000 by 2026, suggesting a 14% upside. The shift reflects optimism about India's growth driven by supportive policies and investor interest.
Key Takeaways
- Goldman Sachs upgrades Indian equities to 'Overweight'.
- Nifty target set at 29,000 by end-2026.
- Potential 14 percent upside from current levels.
- Growth supported by Reserve Bank of India's policies.
- Corporate earnings show positive trends.
New Delhi, Nov 9 (NationPress) The prestigious global investment bank Goldman Sachs (GS) has adopted an optimistic outlook on India, enhancing its rating for Indian equities to 'Overweight' while establishing a Nifty target of 29,000 by the close of 2026. This projection suggests a possible 14 percent upside from current market levels.
In its recent analysis titled 'Leaning In as Growth Revives; Raising India back to Overweight', Goldman Sachs expressed confidence in a resurgence of India's growth momentum, spurred by favorable monetary and fiscal policies, a rebound in earnings, and renewed interest from foreign investors.
The downgrade made in October 2024, which was attributed to high valuations and a slowdown in earnings, has now been overturned with this upgrade.
The report highlights that Indian equities have underperformed the MSCI EM index by 25 percentage points over the past year, marking the largest disparity seen in two decades, mainly due to significant $30 billion outflows from foreign portfolios.
Goldman Sachs pointed out that recent trends indicate a positive shift in sentiment as valuations stabilize and foreign risk appetite increases. “We now see a case for Indian equities to perform better over the coming year,” the report stated.
The bank anticipates that growth will be bolstered by the Reserve Bank of India’s easing measures, such as interest rate cuts, enhanced liquidity, and bank deregulation, along with reductions in GST and a slower pace of fiscal consolidation. These elements are expected to strengthen domestic demand in the next two years.
Corporate earnings for the September quarter have surpassed expectations, leading to upgrades in several sectors. GS forecasts MSCI India profits to grow from 10 percent in 2025 to 14 percent in 2026, underpinned by a more robust nominal growth environment.
The bank believes that the next wave of market growth will be driven by sectors including financials, consumer durables, defense, technology, media, telecom (TMT), and oil marketing.
Additionally, it noted that low food inflation, a strong agricultural cycle, GST rate cuts, forthcoming state elections, and potential 8th Pay Commission wage increases are all anticipated to enhance mass consumption and elevate demand and profits in consumer sectors.
Point of View
Goldman Sachs' upgrade of India's equities reflects a broader trend of recovery and investor confidence. This perspective aligns with our commitment to provide insights that not only inform but guide our readers through the complexities of the market.
NationPress
09/11/2025
Frequently Asked Questions
What is the new Nifty target set by Goldman Sachs?
Goldman Sachs has set a Nifty target of 29,000 by the end of 2026.
Why did Goldman Sachs upgrade India to 'Overweight'?
The upgrade was based on expected growth revival driven by supportive policies, earnings rebound, and increased foreign investor interest.
What factors are expected to support India's growth?
Supportive monetary and fiscal policies, easing measures from the Reserve Bank of India, and a rebound in corporate earnings are key factors.
How have Indian equities performed recently?
Indian equities have underperformed the MSCI EM index by 25 percentage points over the past year.
Which sectors are expected to lead market gains?
Sectors such as financials, consumer durables, defense, TMT, and oil marketing are expected to drive the next phase of market gains.
