Emkay Global on Monday said it would play the recovery post the US-Iran deal through consumption, as it believes the immediate beneficiaries of the deal will be shares of oil marketing companies (OMCs), transportation, cement, and select lenders, along with Middle East-exposed stocks like Larsen & Toubro (L&T). For now, the domestic brokerage has retained its Nifty target of 29,000 for March 2027. 

Emkay said the recent correction, where Nifty fell 7 per cent since February 2026, has normalised valuations for the broader market. Nifty trades at 17.8 times, below its past five-year average of 19.6 times. Emkay said market breadth is supportive too, with 48 per cent of the consensus universe below long-term mean (28 per cent below -1SD). 

Nifty target 

The expected FY27 EPS growth of 15.7 per cent suggests strong earnings recovery, subject to slight near-term risks from the oil shock and the effects of the ME crisis, Emkay said.

"We see crude settling at $75-80 a barrel, and this is unambiguously positive for India on external account, domestic liquidity, and supply chain easing. We maintain our FY27 Nifty target at 29,000 and see a strong rally sustaining in the short term. Our bullishness is supported by strong earnings, with FY27E Nifty EPSg at 15.7% and moderate valuations at 17.8 times. OMCs, transportation, cement, and select lenders (banks/NBFCs) are the best ways to play the recovery," Emkay said.

Nifty settled Monday's session at 23,853.90, up 231 points or 0.98 per cent. The BSE Sensex settled the day at 76,264.33, up 736.38 points or 0.97 per cent. 

To recall, the US and Iran agreed on a deal to end the war in the Middle East, with the Strait of Hormuz set to re-open on Friday, June 19. This has a three-fold macro benefit for India. First, Brent should settle at $75-80 a barrel against an average of $103 per barrel in Apr-May-26. This delivers a proforma benefit of 64 per cent on the current account deficit (CAD) 

"Second, it addresses supply chain bottlenecks and potential RM shortage worries across multiple sectors and averts a potential inflation shock. Third, the relief on the external account translates to improved domestic liquidity, which should help interest rate transmission. We expect a multi-asset rally: Rs93/USD, the 10-year gilt to 6.75 per cent, and the 12M T-bill to 5.5 per cent. We expect the consumption cycle to be a standout beneficiary, continuing the upward momentum from Q4CY25 after GST cuts kicked in, Emkay said.

Top stock ideas
"Our top ideas to play the market recovery: OMCs (all trading at

Upstream energy stocks could be among the laggards as their investment case has weakened. Safe-haven sectors such as FMCG, pharma and technology may also underperform, Emkay said.

Key risks
Emkay noted that the deal will be inked on Friday. It is still a high probability, but not a certainty – given the number of false dawns during the ceasefire, any disruption would send oil spiking and reverse our entire thesis. 

Also, the entire region is on a knife’s edge, and flare-ups could recur even after the deal is signed. 

Besides, the damage to oil infra is still not clear – there may be a negative surprise on timelines for supply normalization. Emkay still believes the oil market is pricing in 3-6 months of delays. 

"We see low probabilities of these risks crystallizing, and are working of our base case of the SoH fully reopening on Friday and oil receding to $75-80," it said.