Goldman Sachs Sees Nifty Reaching 26,500 Over Next 12 Months

Goldman Sachs is optimistic about India's stock market, predicting that the Nifty will reach 26,500 over the next 12 months. This would represent a 12% increase from current levels.

Sunil Koul, Global Emerging Market Equity Strategist at Goldman Sachs, attributed this forecast to improving economic growth and corporate profitability in India.

Koul emphasized that despite recent underperformance against other emerging markets, the target remains unchanged. He cited stronger high-frequency data, better quarterly earnings, and around 12-13% earnings growth from Indian companies as evidence supporting his view.

Foreign investor sentiment towards India has also improved, with net equity inflows of $2-3 billion in July and August. However, foreign investors remain underweight on India, leaving room for further allocation if sentiment improves.