Citi Raises Nifty 50 Forecast to 28,000 Points by End of 2027

Citi Research has raised the target level for India's Nifty 50 stock index to 28,000 points by the end of 2027. Previously, the bank had forecasted 26,000 points by September 2027. The new target suggests a growth potential of approximately 12% relative to the closing on November 8 at 24,986.4 points.

The forecast revision followed the strongest week for the Indian stock market since February 2021. During the period from November 2–6, Nifty 50 gained 8.58%, but after a special trading session on November 8, it remained about 4.4% below the level at the end of 2025.

Why Citi Expects Growth in Indian Stocks

In a strategic review on November 8, Citi analysts highlighted three main factors that could support the Indian stock market.

The first is an increase in corporate profits. According to the bank's forecast, the aggregate profit of companies included in the Nifty 50 will grow by an average of 15–16% annually during the 2026–2028 fiscal years.

The second factor is the potential decline in oil prices. India is among the largest importers of this raw material, so changes in oil prices affect the trade balance, inflation, and company expenses.

According to Citi's calculations, a $10 per barrel decrease in oil prices could reduce India's current account deficit by 0.3–0.4 percentage points of GDP, lower inflation by 0.5 percentage points, and increase earnings per share for Nifty 50 companies by approximately 2%.

The third factor is related to the potential redistribution of international capital. Analysts believe that after a prolonged interest in companies related to artificial intelligence, some investors may increase their investments in other markets, including India.

Foreign Investors Return to the Indian Market

According to Citi analysts Surendra Goyal and Vijit Jain, increasing the relative share of Indian stocks in international managers' portfolios by one percentage point could provide an additional inflow of about $12 billion.

The first signs of capital redistribution were already observed in early November. According to Reuters, foreign portfolio investors purchased Indian stocks worth more than $4 billion during the first trading sessions of the month.

Meanwhile, during the week of November 2–6, Taiwan's TAIEX index fell by 12.2%, and South Korea's KOSPI dropped by 11.71%. Against this backdrop, Nifty 50 rose by 8.58%.

Citi associates the potential change in investment preferences with a reassessment of the prospects for AI infrastructure spending. However, further redistribution of funds between markets remains an assumption by analysts.

HSBC Upgrades Indian Market Assessment

Simultaneously, HSBC upgraded its recommendation on Indian stocks from neutral to overweight. This means the bank now considers an increased share of Indian assets in investment portfolios relative to a chosen market benchmark as more preferable.

HSBC analysts pointed to the resilience of corporate profits, the development of lending, and more attractive stock valuations after a prolonged period of the Indian market lagging behind other emerging economies.

Among the sectors of interest to the bank are banking, industry, consumer durables manufacturing, insurance, and healthcare services.

What Risks Could Affect Citi's Forecast

To justify the new target level, Citi raised the price-to-earnings (P/E) ratio applied to the forecasted earnings of Nifty 50 companies from 17 to 18. This means the bank expects not only an increase in profits but also investors' willingness to pay a higher price relative to them.

However, investment companies' assessments vary. In October, Bernstein lowered the target level for Nifty 50 for December 2026 to 25,000 points, citing risks of high oil prices, supply chain disruptions, and insufficient corporate profit growth.

Citi also highlights risks such as geopolitical instability in the Middle East, a slowdown in consumption in India, and the potential impact of artificial intelligence on employment.

Thus, the forecast of 28,000 points assumes a combination of profit growth, favorable oil prices, and increased interest from foreign investors. The realization of these conditions remains uncertain.