India's equity markets are set for an optimistic run over the next 2–3 years, backed by improving corporate earnings, domestic consumption, private investment, strong credit growth, and more reasonable valuations, according to a report released on Tuesday, 10 November 2026. The findings come from Carnelian Asset Management & Advisors, which assessed market conditions during Samvat 2082.

Credit Growth and Earnings Recovery

Credit growth averaged approximately 16 per cent in Samvat 2082, compared with 10 per cent in the previous year, the report noted. Private capital expenditure, consumption, and investment activity continued to strengthen across the economy during the period.

Corporate earnings are showing signs of a broad-based recovery. Of the 392 companies in the Nifty 500 that had reported quarterly results, revenue grew 24 per cent year-on-year while profit after tax rose 21 per cent, indicating improving earnings momentum across sectors.

Domestic Investors Offset Foreign Selling

Domestic institutional investors have continued to provide firm support to Indian equities. While foreign investors sold approximately ₹4 lakh crore worth of Indian equities during the last Samvat, domestic institutional investors invested around ₹7.1 lakh crore — more than offsetting the outflows and underpinning market stability.

This divergence underscores a structural shift in India's equity ownership pattern, with domestic capital increasingly acting as a stabilising force against foreign portfolio volatility — a dynamic that has become more pronounced over the past two years.

Valuations Now More Reasonable

Market valuations have moderated considerably over the past year. The Nifty 50 and Nifty 500, which were trading at one-year forward price-to-earnings multiples of 24x and 26x respectively a year ago, are now trading at approximately 19x and 21x — a de-rating that analysts argue makes the risk-reward more attractive for fresh allocations.

Citi Research Sets Nifty 50 Target at 28,000

Separately, brokerage firm Citi Research in a recent report projected that the Nifty 50 will reach 28,000 points by the end of 2027, implying an upside of about 12 per cent from its last close of 24,986. The target is supported by a strong earnings outlook, lower oil prices, and the prospect of slower global artificial intelligence-related capital expenditure.

Indian equities had lagged global peers until recently, as enthusiasm around the artificial intelligence trade and elevated crude oil prices weighed on sentiment for the world's third-largest oil importer. A potential easing of both headwinds now appears to be improving the medium-term outlook.

What to Watch

With domestic flows providing structural support and valuations having corrected from peak levels, the near-term trajectory of Indian equities will likely hinge on the pace of earnings upgrades, the trajectory of global oil prices, and any shifts in foreign portfolio investor sentiment. Analysts and institutional investors will be watching quarterly earnings seasons closely for confirmation that the broad-based recovery signalled in Nifty 500 data is durable.