PL Capital Raises NIFTY Target to 27,123

Mumbai, 2nd September, 2026: PL Capital, one of India's most trusted financial services organisations, in its latest India Strategy Report titled "Emerging headwinds to curtail broad based rally", believes that while the Indian equity market has remained resilient despite geopolitical uncertainty, deficient monsoons and global supply-chain disruptions, emerging risks could limit the sustainability of a broad-based market rally. The brokerage remains constructive on the medium-term outlook, supported by resilient domestic demand, strong credit growth and improving liquidity, but expects markets to remain volatile in the near term.

According to the report, India's corporate earnings remained strong in 1QFY27, with PL Research's coverage universe excluding Oil & Gas reporting 15.5% sales growth and 17% PAT growth, the highest PAT growth since 4QFY24. However, EBITDA growth at 9.6% remained below the average of the previous eight quarters, while EBITDA margins declined by 148 basis points, indicating that the impact of higher commodity costs and supply-chain disruptions is beginning to emerge. The full impact of higher-cost inventory is expected to become more visible from 2QFY27.

Taking into consideration market valuations and the medium-term earnings outlook, PL Capital has raised its 12-month NIFTY target to 27,123 from 27,019 earlier. The NIFTY is currently trading at 17.3x one-year forward EPS, representing an 11.7% discount to its 15-year average P/E of 19.6x. PL Capital values the index at 10% discount to its 15-year average P/E, based on FY28 EPS of ₹1,537.6. The brokerage's bull-case target stands at 30,137, while its bear-case target is 24,971, suggesting limited medium-term downside despite near-term volatility.

The report highlights El Niño and the deteriorating monsoon situation as key risks to inflation and demand. India's cumulative monsoon deficit has widened to around 14%, with 17-18 of 36 meteorological subdivisions reporting deficient rainfall. Skymet has forecast a 70% probability of drought and expects the seasonal monsoon deficit to reach 15%. PL Capital believes a stronger El Niño could drive higher prices of agricultural commodities such as coffee, cocoa, palm oil and soybean, adding pressure to food inflation and consumption demand.