Emkay Global has reiterated its constructive view on Indian equities, even as the prolonged Middle East conflict and high crude oil prices keep markets on edge. In its latest India Strategy report, Emkay Global said it expects the Nifty to touch 29,000 by March 2027, based on a target valuation multiple of 19.2 times FY28 earnings.
Emkay Global said near-term volatility may persist because of pressure on global energy markets and the continued closure of the Strait of Hormuz, but added that India’s domestic macroeconomic resilience, improving earnings trajectory and policy support continue to provide a strong base for long-term growth.
According to Emkay Global, the Q4FY26 earnings season has started on a relatively steady note. Nearly 20 per cent of its coverage universe has reported results so far, with 46 per cent of companies posting earnings above expectations and 29 per cent missing estimates. The brokerage has retained its FY27 Nifty EPS estimate at Rs 1,230 and kept earnings growth expectations at nearly 13 per cent.
The report said the Nifty is now trading at around 19.2 times FY27 forward earnings, close to its five-year long-term average. Emkay Global said this means some valuation support has faded, but any sharp correction triggered by global concerns should be seen as a tactical buying opportunity rather than a structural risk to India’s long-term growth outlook. It remains overweight on discretionary consumption, materials, industrials and real estate, and underweight on financials, energy, healthcare, staples, telecom and technology.
A key risk, Emkay Global said, is the closure of the Strait of Hormuz for over 11 weeks, which has pushed Brent crude into the $105-110 a barrel range. If Brent holds at $100 a barrel, India’s current account deficit could widen to 2.4 per cent of GDP from a pre-shock estimate of 1.3 per cent, GDP growth could slow to 6.3 per cent from 7 per cent, and CPI inflation could rise to 4.6 per cent. In a more extreme $130 crude scenario, growth could slow to 5.5 per cent and inflation could rise to 5 per cent.
Emkay Global also said the recent Rs 3 per litre increase in fuel prices covers only around 20 per cent of under-recoveries for oil marketing companies, suggesting more price hikes may be needed if crude stays elevated. It described sustained high energy prices as a “four-way drag” on the economy through inflation, corporate profitability, government finances and consumer spending.
Even so, Emkay Global said domestic policy measures should support growth and consumption. These include income tax cuts, GST reductions and cumulative RBI rate cuts of nearly 125 basis points since February 2025, along with continued government capital expenditure in railways and defence. The brokerage added that markets may be under-pricing the earnings recovery expected over FY27 and FY28, with corporate earnings seen growing by nearly 14 per cent over the next two financial years.
Emkay Global said pressure on the rupee may continue in the near term because of a stronger US dollar and high oil prices, but expects conditions to improve if the geopolitical situation stabilises and crude supply routes normalise. A diplomatic resolution to the Iran conflict and easing energy prices, it said, could lift sentiment, support consumption-led growth and help equity markets rebound.
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Published on: May 20, 2026 11:25 AM IST
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