India’s benchmark Nifty 50 index is projected to trade between 26,500 and 30,000 over the next six to nine months, according to JPMorgan’s Chief India Equity Strategist Rajiv Batra. The large-cap gauge remains nearly 1,300 points short of its all-time high of 26,216 achieved in September last year.
In terms of sectors, Batra is bullish on Financials, Consumer Staples, Consumer Discretionary (excluding Autos), Materials, Hospitals, Real Estate and Power. He is underweight on IT, Pharma and Autos counters.
Indian companies reported a largely in-line first quarter, with high single-digit earnings growth amid global headwinds and muted domestic macroeconomic conditions. The revenue and net profit growth of MSCI India companies was 9% year-on-year, Batra said in a note.
A key highlight of the quarter was that there were higher estimate beats than misses and better sectoral breadth of earnings growth. “Corporates remain cautiously optimistic about FY26 and earnings revision breadth is much better than feared,” he said.
Rajiv Batra said the proposed GST rationalisation will significantly boost domestic demand, providing crucial support to the Indian economy amidst challenges posed by US tariffs. Additionally, income tax cuts, lower inflation, policy rate easing, good monsoon and festive demand will lead to a further recovery in growth in the second half of the current financial year.
Why Materials And Not Pharma
JPMorgan upgraded Materials to ‘Overweight’ and downgraded Pharma to ‘Underweight’. According to Rajiv Batra, an upgrade for Materials is driven by domestic demand, reasonable valuations, policy headwinds, expectations of production cuts in China, potential margin improvements and revival of real estate demand.
His preferred picks are JSW Steel Ltd., Hindalco Industries Ltd., UltraTech Cement Ltd., and Pidilite Industries Ltd.
On the other hand, concerns over US generic-focused names, driven by tariff uncertainties, the anticipated decline in gRevlimid’s contribution starting the second half of FY26, and a generally low-growth profile has triggered a bearish mood for pharma stocks.
“Despite these challenges, the sector trades at an expensive valuation with a forward P/E of 26x. Domestic-focused pharma names and hospitals are preferred for their growth visibility and disciplined capital allocation,” the note said.
. Read more on Markets by NDTV Profit.