The Nifty 50 could rally 20% to 27,000 by September 2027, according to , which remains constructive on Indian equities despite a prolonged market correction, elevated crude oil prices and global uncertainties.
The domestic benchmark indices rose on Friday, 9 October, snapping their longest weekly losing streak in 25 years, although gains remained modest amid concerns over tighter monetary policy and rising crude oil prices. The Nifty 50 climbed 1.3% to 22,520.45, while the BSE Sensex advanced 1.23% to 72,472.33, led by IT stocks after Tata Consultancy Services’ quarterly earnings highlighted growing AI-related revenue contributions and robust international business growth.
Despite Friday’s rebound, the Nifty 50 declined for eight consecutive weeks, falling 8.7% over the period.
Against this backdrop, Emkay sees scope for a recovery as resilient corporate earnings, reasonable valuations and strong domestic fundamentals support the market. The brokerage has set a September 2027 target of 27,000 for the Nifty 50, implying an upside of around 20% at a valuation of 18.8 times one-year forward earnings.
Why is Emkay bullish on the Indian stock market?
1. Corporate earnings remain resilient despite global headwinds
Emkay expects earnings growth to remain healthy in the September quarter, even as geopolitical tensions, trade uncertainty and elevated developed-market bond yields weigh on investor sentiment.
The brokerage estimates that companies under its coverage will report 24.8% year-on-year revenue growth and 21.5% adjusted profit growth in Q2 FY27. Energy, utilities and automobiles are expected to lead revenue growth.
For the Nifty 50, excluding banking, financial services and insurance (BFSI), Emkay expects revenue to grow 28% year-on-year and profit after tax (PAT) to rise 21.6%.
Industrials are expected to lead sectoral earnings growth, with PAT projected to rise 78.7%, followed by metals and mining at 74.9%. Utilities and automobiles are also expected to deliver strong growth, with projected PAT increases of 42.6% and 41.2%, respectively.
However, Emkay cautioned that the earnings recovery is not broad-based. The brokerage expects adjusted PAT growth of 10.6% for the BSE 500, excluding BFSI, highlighting the gap between large-cap earnings and the broader market.
2. Valuations have become more attractive after the correction
The recent market sell-off has brought valuations below their historical averages, according to Emkay, providing investors with a more favourable entry point.
The brokerage noted that the Nifty’s one-year forward price-to-earnings ratio has fallen below its long-term average and is trading below the minus-one-standard-deviation level on its valuation assessment.
Emkay’s analysis also shows that 36% of the companies under its coverage are trading below the minus-one-standard-deviation valuation level, compared with 24% in the previous quarter.
This valuation correction, combined with expected earnings growth, underpins the brokerage’s constructive view on equities.
For FY27 and FY28, Emkay expects Nifty earnings per share to grow 17.9% and 13.6%, respectively. It believes the market could recover as investors gain greater confidence in earnings delivery and macroeconomic conditions improve.
3. Domestic fundamentals offer support
Emkay believes India’s underlying economic and corporate fundamentals remain supportive despite the challenging global environment.
The brokerage highlighted sustained economic growth, healthy domestic demand, stronger corporate and financial-sector balance sheets and well-managed government finances as factors that could support equities over the medium term.
It also expects corporate earnings to benefit from the continued recovery in demand. However, the brokerage said investors should closely monitor margins and management commentary for the second half of FY27, particularly as the favourable base effect from GST changes turns adverse.
4. Crude oil and global bond yields remain key risks
Despite its bullish outlook, Emkay warned that macroeconomic headwinds could delay the market recovery.
Brent crude prices around $101 per barrel and a narrow India-US 10-year government bond yield differential of 204 basis points are weighing on the current account deficit, the rupee and foreign portfolio investor flows, according to the brokerage.
The Nifty 50 has corrected around 10% since 1 August 2026, amid these pressures.
Emkay also cautioned that earnings growth could face challenges in the second half of FY27 as companies contend with a tougher base, the delayed impact of the West Asia conflict and tighter monetary conditions.
The brokerage flagged a potential downside scenario in which the Nifty could fall to 21,000 if crude oil prices remain above $100 per barrel and government bond yield spreads stay narrow.
Nifty 50 target 27,000: What could drive the rally?
Emkay’s September 2027 target of 27,000 is based on a valuation multiple of 18.8 times the Nifty’s one-year forward earnings. The brokerage said this multiple remains below the index’s long-term average, leaving room for a recovery if earnings and macroeconomic conditions hold up.
The key trigger will be whether corporate earnings sustain their first-half momentum as companies enter a more challenging second half of FY27. Margin pressures, the breadth of earnings growth and revisions to earnings estimates will remain important indicators to watch.
In short, Emkay’s bullish call rests on the combination of reasonable valuations, healthy domestic fundamentals and resilient earnings. But the projected 20% upside depends on geopolitical tensions easing, global yields stabilising, and corporate earnings meeting expectations.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.