Goldman Sees India Market at 26,500 in 12 Months

Goldman Sachs remains bullish on India's stock market, predicting it will reach 26,500 points over the next 12 months. This would represent a 12% increase from current levels.

According to Sunil Koul, Global Emerging Market Equity Strategist at Goldman Sachs, improving economic growth and corporate profitability are supporting the Indian market. He noted that India's recent underperformance against other emerging markets does not change his target of 26,500 points.

Koul expects Indian companies to deliver around 12-13% earnings growth over the next year, which he believes is achievable as the recovery broadens. Foreign investor sentiment towards India has also improved, with net equity inflows of $2-3 billion in both July and August.

Goldman Sachs favors financials, refiners, hotels, and select defense and utility stocks. Koul remains underweight on IT services, citing high valuations and pressure on earnings. He prefers selective opportunities in staples and tourism, with a tilt towards urban demand.