Whalesbook
Market Sentiment Survey
Indian equity valuations are now viewed as reasonable by a significant majority of market professionals. A recent Moneycontrol Market Poll, surveying nearly 60 experts, found 70% believe current valuations are fair after recent price adjustments across stocks and sectors. Another 4% even consider them attractive. This contrasts with earlier perceptions of stretched valuations, with analysts like Axis Securities' Rajesh Palviya noting that price corrections have made them more palatable.
Nifty Outlook Mixed
Projections for the benchmark Nifty index by the end of 2026 show a divided outlook. A plurality of 52% of poll participants expect the Nifty to trade in the 28,000-30,000 range. Another 31% anticipate a range between 26,000 and 28,000. However, some analysts, like Deepak Jasani, remain cautious, suggesting valuations are still elevated compared to historical medians and competing markets, especially as earnings growth revival faces delays. Jasani forecasts a potential 10% correction from current levels by year-end 2026.
IPO Supply Concerns Loom
A notable concern emerging from the poll is the potential impact of a robust Initial Public Offering pipeline. A majority, 51%, of experts believe the heavy supply of new listings could weigh down returns in the secondary market. While some foresee improved market depth mitigating this effect, others acknowledge that strong domestic liquidity might continue to support IPO demand, potentially leading to portfolio rebalancing as investors shift funds towards new offerings. Jasani anticipates a potential slowdown in IPO issuance for 2026 compared to 2025 due to weaker recent IPO performance.
Earnings Expectations
Regarding earnings growth for the fiscal year 2027, expectations are varied. Thirty-four percent of respondents project Nifty earnings growth between 10% and 12%, while 30% anticipate growth exceeding 12%. A combined 36% expect lower growth rates. Analysts point to factors like consumption revival and inflation levels as key determinants for future profitability, with some seeing mid-teen growth across the broader market.
