Nifty could rally to 28,615 by December, predicts Axis Direct
Private capex revival and strong domestic demand to drive Indian benchmark index higher, says brokerage.
1Bull case scenario for Nifty
Axis Direct forecasts the Nifty index could reach 28,615 by December 2026 in its optimistic scenario. This projection hinges on a revival of private sector capital expenditure (capex) in India. The brokerage cites resilient domestic demand and improving corporate profitability as key supporting factors. It maintains overweight positions on BFSI, healthcare and capital goods sectors while adopting a cautious stance on technology due to global headwinds.
2Key growth drivers
Analysts highlight structural improvements in India's economy supporting Nifty's performance. Private investments exceeding 10% of GDP and manufacturing sector growth expectations stand out. The report identifies financial services and infrastructure companies as primary beneficiaries. Axis recommends long-term portfolio strategies for investors, emphasizing sector rotation based on economic recovery patterns.
3Sectoral allocation
BFSI (Banking and Financial Services) commands the highest weight at 35.7% in Axis Direct's model portfolio. Healthcare follows with 13.4% allocation, while capital goods account for 12.8%. The brokerage expects these sectors to benefit from credit growth, pharmaceutical exports and government infrastructure spending. Technology sector exposure remains limited due to global macroeconomic uncertainties.
4Near-term risks
The report cautions that Nifty's current P/E ratio of 22.5x remains above historical averages. Global inflation, US rate hikes and commodity price volatility may trigger short-term corrections. Increased market volatility is anticipated during September-October period. Investors are advised to remain selective and focus on fundamentally strong stocks with reasonable valuations.
5Technical indicators
Nifty trading above its 200-day moving average is viewed as technically positive. The 26,500 level is identified as crucial support. With RSI (Relative Strength Index) at 58, the index hasn't entered overbought territory yet. Analysts suggest that a decisive break above 27,000-27,500 range would increase likelihood of achieving 28,615 target.
6Global market influences
US interest rate policy and China's economic slowdown feature as key external risks for Indian markets. Brent crude prices hovering around $85-90/barrel could pressure inflation. However, RBI's $600 billion forex reserves provide cushion against rupee volatility. Recent FII turning net buyers is interpreted as positive signal for market sentiment.
7Earnings projections
Nifty companies are expected to deliver 18-20% net profit growth in FY2026-27. Banking sector credit growth is projected at 15%, while capital goods order inflows may grow 25%. Demand revival is anticipated in automotive and consumer sectors ahead of festival season. Most sectors (excluding IT services) are forecast to show EBITDA margin improvement.
8Investor implications
Axis Direct's projection reflects confidence in India's medium-term growth story. Investors are advised to maintain sectorally balanced portfolios and adopt phased accumulation strategies over 3-6 month horizons. Financial services, infrastructure and consumption-themed stocks are expected to outperform. Despite global uncertainties, domestic market resilience is projected to continue.
Original article: Economic Times — Nifty'nin Aralık'ta 28.615'e çıkabileceği öngörüsü