Emkay retains Nifty target of 29,000 despite near-term risks; Bets on 6 key sectors for a March 2027 breakout 

In its latest India Strategy report, the brokerage retained its March 2027 Nifty target of 29,000 based on 19.2 times price-to-earnings valuation and said recent volatility does not alter its broader market stance.

At the portfolio level, Emkay remained overweight on discretionary consumption, materials, industrials and real estate, while staying underweight on financials, energy, healthcare, staples, telecom and technology.

The brokerage also identified oil prices and developments around the Strait of Hormuz as the key variables to watch in the near term.

Emkay keeps its Nifty target at 29,000

Emkay said current market valuations are near long-term averages, with Nifty trading at 19.2 times FY27 price-to-earnings.

The brokerage maintained its March 2027 target and said periods of weakness should be treated as opportunities rather than a change in market direction.

“Our Mar-27 Nifty tgt of 29,000 at 19.2 PER; Expect normalcy to return soon, any weakness is entry opportunity,” Emkay said.

1. Discretionary remains the top sector call

Discretionary consumption remained Emkay’s strongest overweight position.

The brokerage linked the call to domestic support measures including income tax cuts and cumulative Reserve Bank of India rate cuts of 125 basis points since February 2025.

“An Iran war resolution would clear path for consumption revival,” Emkay said.

2. Materials stays in the preferred basket

Emkay retained an overweight stance on materials.

The brokerage said market positioning still does not fully account for expected earnings growth across FY27 and FY28.

“Market has not priced in 14% EPSg for FY27/FY28, small risk to estimates, large upside to positioning,” the brokerage said.

3. Industrials continue to benefit from spending momentum

Industrials remained another preferred allocation.

Emkay identified capital expenditure momentum and continued spending across railways and defence as supportive factors.

“Capex push on railways and defense continues,” Emkay said.

4. Real estate remains among overweight calls

Real estate continued to feature in Emkay’s preferred sector list.

The brokerage linked the positioning to domestic resilience amid external pressures.

“Macro recovery, external headwinds, domestic resilience,” Emkay said.

5. Financials hold up better while technology sees downgrades

Emkay said sectoral trends remained uneven during the earnings season.

According to the brokerage, banking, financial services and insurance held up relatively better compared with other parts of the market. At the same time, the report pointed to selective estimate downgrades in technology.

“Sectoral divergence, BFSI holding up, some downgrades in Tech,” Emkay said.

6. Energy and defensives remain out of favour

Emkay maintained underweight positioning across energy, healthcare, staples, telecom and technology.

According to its scenario analysis, prolonged energy disruption could push Nifty toward 21,000.

“Continued energy crisis could push Nifty to 21,000, 12.4% below LTA on PER, correction would be transient,” Emkay said.

Oil remains the key near-term risk

Emkay said the Strait of Hormuz remained shut for eleven weeks and comprehensive peace negotiations remained elusive.

Brent crude moved into the $105 to $110 per barrel range, resulting in under-recoveries of Rs 14 per litre.

The brokerage noted that the recent Rs 3 per litre increase in fuel prices addressed only 20% of current under-recoveries.

“Fundamentals are supportive, but sustained high oil now the key swing factor for growth, inflation, and RBI flexibility,” Emkay said.

Earnings season remains stable

Emkay said the fourth quarter earnings season has started on a stable footing.

Nearly one-fifth of its coverage universe has reported results so far, with 46% beating estimates and 29% missing.

The brokerage said Nifty earnings per share for FY27 remained at Rs 1,230 while implied earnings growth held around 13%.

“Confident on FY27/FY28 earnings recovery; near-term volatility a buying opportunity,” Emkay said.

Conclusion

Emkay maintained a constructive stance on Indian equities despite acknowledging near-term risks linked to oil prices and geopolitical developments.

The brokerage retained its March 2027 Nifty target of 29,000 and continued to back discretionary consumption, materials, industrials and real estate.

At the same time, it remained cautious on financials, energy, healthcare, staples, telecom and technology.

Disclaimer: The views and target levels discussed in this report are based on institutional research analysis and should not be construed as direct buy, sell, or hold recommendations for retail investors. Stock market investments are subject to market risks, and individual financial positions or tax implications can vary widely. Readers are advised to consult a SEBI-registered investment advisor before making any allocation decisions.

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