Nomura India has kept its March 2026 Nifty target unchanged at 26,140 but reshuffled its top stock picks. The international brokerage house has highlighted a distinc focus on domestic consumption driven sectors along with pharmaceuticals while trimming exposure to metals and capital goods. The Nifty target implies only a small upside of around 4% from current levels, reflecting the brokerage’s view that valuations are already rich and earnings growth will stay moderate in the near term.
At the stock level, Nomura has added Swiggy, Titan, Prestige Estates Projects and Alkem Laboratories to its preferred list, while removing Jindal Steel and Power, BPCL and Lodha Developers. It also swapped Ather Energy for TVS Motor, and Lodha for Brigade Enterprises, citing better upside potential and domestic focus.
Nomura’s Market view: high valuations, modest upside
Nomura’s India strategy team pointed out that the Nifty’s valuation premium to emerging markets has now normalised to pre-pandemic levels, around 41% while the benchmark index is trading about 17% above pre-Covid averages.
India’s equity market, it noted, has underperformed global peers over the past year due to an earnings slowdown, but still posted a 12.4% annualised return over five years, reflecting strong structural underpinnings.
“The cyclical slowdown in earnings is likely to sustain in the near term, with a modest recovery in FY27,” the report said. It added that while a consumption boost could provide short-term relief, weak household savings and slow wage growth will likely limit the multiplier effect.
Stock changes: From cyclicals to consumption and healthcare
Nomura’s portfolio changes reflect a clear pivot toward steady domestic growth names and a more selective approach in sectors that have rallied sharply.
Swiggy was added as Nomura expects internet businesses to show sharper focus on profitability, with listed platforms prioritising “profitable growth over scale.” The brokerage said the funding environment is improving but will continue to reward companies with visible earnings potential.
Titan joined the preferred list on improving discretionary demand and valuation reset. Nomura said that GST and income tax cuts, coupled with low inflation, have created favourable conditions for jewellery and premium retail players.
Prestige Estates Projects replaces Lodha Developers as the brokerage’s preferred real estate bet. Nomura said Grade-A developers have gained market share and maintained strong pre-sales, while valuations for top players now trade close to their net asset values, limiting downside risk.
Alkem Laboratories marked Nomura’s shift from tactical caution to a constructive stance on pharmaceuticals. The brokerage said pharma profitability is being supported by benign input costs, stable U.S. pricing, a favourable currency and domestic price increases. It also cited GLP-1 therapies as an emerging growth driver for Indian drugmakers.
That apart, Nomura replaced Jindal Steel and Power with ACC, saying it now prefers cement over metals. The brokerage said the cement sector has maintained strong pricing discipline and will see volume growth pick up in the second half of FY26 as construction activity accelerates.
BPCL was dropped for Petronet LNG, with Nomura noting a benign imported gas price outlook and “robust volume growth” in city gas distribution. The brokerage said Petronet’s valuations remain undemanding compared with oil marketing companies that could face margin pressure if excise duties rise.
Ather Energy was replaced by TVS Motor, with Nomura preferring established auto manufacturers that can benefit from GST cuts, model-cycle tailwinds and rising premiumisation in the domestic market.
Nomura positive on large banks and NBFCs
Nomura remained positive on financials, calling them a core overweight as RBI’s monetary easing since December 2024 supports credit growth recovery. It expects margins to stabilise and asset quality to improve across large lenders.
The brokerage continued to prefer ICICI Bank, State Bank of India and Axis Bank, given their superior return profiles and funding strength. Among non-bank lenders, HDFC Asset Management Company and Avenue Supermart Bank are favoured for their diversified portfolios.
Nomura said NBFCs are better placed than banks in the current backdrop of falling interest rates, although asset quality remains a watchpoint in microfinance and MSME loans. It prefers diversified and gold financiers, noting that stress in smaller-ticket segments is “contained and not systemic.”
The brokerage remained cautious on insurance, warning that the recent GST cut could compress margins as companies lose input tax credits. Health insurers are expected to recover from last year’s low base, but structural issues persist across the healthcare ecosystem.
Nomura on consumption: Discretionary demand rebounding
Nomura said rural and mass-urban demand should benefit from two consecutive good monsoons, soft inflation and GST cuts that have lowered effective prices by about 10% across several FMCG categories.
It continues to prefer Tata Consumer Products, Godrej Consumer and Marico in staples, supported by margin expansion from easing input costs.
In discretionary consumption, Titan and Voltas are top picks. Nomura said “low expectations, valuation correction and macro tailwinds” make these stocks favourable after their consolidation phase.
Nomura on autos: Policy boost and model-cycle tailwinds
Nomura expects the recent GST cuts on vehicles to aid near-term demand, especially for two-wheelers and premium models. It prefers Mahindra & Mahindra, TVS Motor and Uno Minda, supported by strong product cycles and a higher share of domestic revenues.
The brokerage remains cautious on auto component exporters with large U.S. exposure, but positive on domestic ancillaries benefiting from EV adoption and rising content per vehicle.
Nomura on cement and real estate: Stronger volumes ahead
Nomura said the cement industry’s “better-than-expected discipline” has led to a strong price recovery this year, with volume growth likely to accelerate in the second half of FY26 as construction picks up. UltraTech Cement, ACC and Ambuja Cement remain top recommendations.
In real estate, Prestige Estates Projects and Brigade Enterprises are the preferred names as organised developers continue to expand market share and maintain strong cash flows. The brokerage said valuations “offer limited downside” and continue to look attractive relative to long-term NAV.
Nomura on pharma: Margin support and new opportunities
Nomura’s renewed confidence in pharmaceuticals rests on stable pricing in the U.S., steady input costs and domestic price increases. It said the GLP-1 segment represents a meaningful new growth area, while generic margins have stabilised after years of volatility.
Its preferred names are Dr. Reddy’s Laboratories, Lupin and Alkem Laboratories, which it expects to benefit from a combination of new launches, favourable currency moves and stable API costs.
Nomura on IT, capital goods, and metals: Selective or cautious
Nomura maintained a cautious stance on IT services, warning that U.S. macro risks and new trade policies could slow discretionary spending. It said Infosys, TCS and L&T Technology Services may do relatively better due to steady order books, but margin expansion is unlikely in FY26.
In capital goods, the brokerage expects moderation in earnings growth as short-cycle demand softens and private capex remains patchy. It prefers Honeywell Automation and CG Power for their diversified business models and exposure to multiple growth levers.
For metals, Nomura said the recent rally “already discounts” supportive factors like safeguard duty extension and cost savings. It replaced Jindal Steel and Power with ACC, citing more sustainable price and volume visibility in cement.
Nomura on energy, telecom and power: Steady earnings base
Nomura’s view on oil and gas is neutral. It expects refining margins to remain healthy but said a rise in excise duties could squeeze OMC marketing margins. Among gas utilities, it continues to prefer Petronet LNG, Mahanagar Gas and Reliance Industries, citing a benign LNG price outlook and robust volume growth.
The brokerage remained positive on telecom, expecting average revenue per user (ARPU) to rise further, supporting stronger free cash flow generation. In power, Nomura expects structural tailwinds from rising demand and renewable capacity additions, particularly in transmission and distribution.