In its latest India strategy report, the brokerage said India’s macroeconomic resilience, improving earnings outlook, and continued policy support are likely to help markets weather near-term global volatility.
The brokerage expects the Nifty to reach 29,000 by March next year based on a target valuation multiple of 19.2 times FY28 earnings. The report comes at a time when global markets are grappling with heightened uncertainty linked to the prolonged conflict in West Asia and disruptions around the Strait of Hormuz, a critical global oil shipping route.
Brent crude prices have remained elevated in the $105–110 per barrel range after the Strait of Hormuz remained shut for more than 11 weeks, according to the report.
Emkay warned that prolonged high oil prices could materially affect India’s economy, given the country’s dependence on imported energy. According to the brokerage’s scenario analysis, if Brent remains around $100/barrel, India’s current account deficit could widen to 2.4% of GDP from the earlier baseline estimate of 1.3%.
GDP growth could also moderate to 6.3% from the earlier expectation of 7%, while consumer inflation may rise to 4.6%. In a more severe scenario where crude prices surge to $130 per barrel, Emkay estimates India’s GDP growth could slow further to 5.5%, and inflation could rise to 5%.
Still, the brokerage believes the broader long-term growth story for Indian equities remains intact.”While global geopolitical developments and elevated crude prices may continue to create intermittent volatility, India’s structural growth drivers remain intact,” said Seshadri Sen, Head of Research and Strategist at Emkay Global.
“Earnings resilience, policy support, easing domestic inflationary pressures, and ongoing capex investments continue to provide a strong foundation for Indian equities,” Sen said.
He added that any sharp correction triggered by global concerns should be viewed as a long-term buying opportunity rather than a structural threat to India’s growth outlook.
Emkay said the March quarter earnings season has started on a relatively stable note despite global uncertainty. Among companies under the brokerage’s coverage universe that have reported results so far, 46% delivered earnings above expectations, while only 29% missed estimates.
The brokerage has retained its FY27 Nifty earnings per share estimate at Rs 1,230 and continues to expect nearly 13% earnings growth. The report noted that the Nifty is currently trading around 19.2 times FY27 forward earnings, close to its five-year average valuation.
Emkay believes markets are still under-pricing the earnings recovery expected during FY27 and FY28. The brokerage expects nearly 14% cumulative earnings growth over the next two financial years.
On the sectoral front, Emkay remains overweight on discretionary consumption, industrials, materials and real estate while staying underweight on financials, energy, healthcare, staples, telecom and technology in the near term.
The report also highlighted concerns around fuel under-recoveries for oil marketing companies.
According to Emkay, the recent Rs 3 per litre increase in fuel prices addresses only around 20% of the current under-recoveries, suggesting additional fuel price hikes may become necessary if crude prices remain elevated.
The brokerage described sustained high crude prices as a “four-way drag” on the economy because they simultaneously affect inflation, government finances, corporate profitability and household spending.
Despite the near-term pressures, Emkay said several domestic policy measures continue to support economic activity. These include income tax cuts, GST reductions and cumulative RBI rate cuts of around 125 basis points since February 2025.
The brokerage said these measures are expected to improve liquidity, support discretionary consumption and encourage private-sector investment. Government spending on railways, defence and infrastructure also continues to support economic activity and employment generation, according to the report.
Emkay further said the rupee may remain under pressure in the short term because of high crude prices and a stronger US dollar, though the Reserve Bank of India is likely to maintain a cautious policy stance to preserve macroeconomic stability.
The brokerage expects the rupee and bond markets to stabilise once geopolitical tensions ease and oil supply routes normalise. The report also pointed to improving trends in financial services sectors such as NBFCs and insurance.
According to Emkay, the NBFC sector has seen significant re-rating over the last few years due to better balance sheets, lower NPAs and stronger capital adequacy. It added that while the pace of outperformance versus banks may moderate, select NBFCs remain well-positioned to deliver healthy growth and profitability.
