Nifty 50: Earnings Momentum To Pick Up, Says Kotak AMC’s Nilesh Shah
In an exclusive conversation, Nilesh Shah, Managing Director of Kotak AMC, shared his views on JPMorgan’s recent projection for the NSE Nifty 50, which expects the index to trade between 26,500 and 30,000 over the next six to nine months.
JPMorgan’s Projection: A Peek into the Future
The projection reflects a bear case at the lower end and a bullish scenario at the upper end, driven by anticipated earnings recovery. So, what’s driving this optimism? Shah attributed it to the significant expansion of the earnings base over FY24 and FY25, leading to a consolidation phase.
“Undoubtedly, we are seeing a phase where earnings growth is likely to be in the high single digits rather than low double digits,” Shah emphasized, adding that this growth momentum is likely to pick up in the current financial year (FY26).
Regulatory Support: A Boost for Growth
Shah highlighted several supportive measures from regulators and the government, including the RBI’s liquidity infusion up to FY26 and unexpected interest rate cuts. “There is hope for one more rate cut,” he added, pointing to relaxed guidelines for infrastructure financing and capital release for banks.
He also mentioned the easing of priority sector lending norms for small finance banks and relaxed gold financing rules. “At SEBI’s end, the R&D fund of 1 lakh crore, if executed well, could create growth opportunities,” Shah said, underscoring the pro-growth stance emerging from various regulatory actions.
Macroeconomic Environment: Stable and Optimistic
Reflecting on the broader economic environment, Shah noted, “Macros have been stable, and the monsoon has been good.” He expressed optimism about the possibility of earnings upside, stating, “We believe FY26 earnings growth for Nifty 50 is likely to be in the high single digits, with midcaps delivering double-digit earnings growth.”
JPMorgan’s Bullish Scenario: A Glimpse into the Future
Earlier last week, JPMorgan projected that the Nifty 50 could reach as high as 30,000 in a bullish scenario, driven by an expected earnings recovery. The investment bank anticipates a 7% year-on-year growth in earnings for Nifty 50 companies and other firms on its radar in the first quarter of FY26.
This projection has sent ripples across the Indian stock market, with investors eagerly anticipating the upcoming Q1 earnings season. Will the Nifty 50 indeed reach 30,000 by March 2026? Only time will tell. However, one thing is certain – the current earnings momentum is likely to pick up, driven by supportive measures from regulators and the government.
