Emkay Global Financial Services maintained a constructive stance on Indian equities, setting a March 2027 Nifty target of 29,000, even as an ongoing West Asia conflict and elevated crude oil prices cast a shadow over near-term prospects.

The brokerage said the Strait of Hormuz has remained shut for eleven weeks following an escalation beginning in early April, pushing Brent crude to $105–110 per barrel. This has created under-recoveries of ₹14 per litre for oil marketing companies. A pump price hike of ₹3 per litre announced by the government addresses only 20 per cent of the gap, with further increases expected unless crude corrects.

Emkay warned that a sustained energy crisis could drag the Nifty to 21,000 — roughly 12.4 per cent below its five-year average price-to-earnings ratio. However, it described any such correction as transient and an entry opportunity for investors.

On the earnings front, the fourth quarter of FY26 has started steadily, with 46 per cent of reported companies beating estimates and 29 per cent missing. The FY27 Nifty EPS estimate holds at ₹1,230, implying earnings growth of approximately 13 per cent, down only 1.6 per cent since end-March. The brokerage expects a stronger recovery in FY28, with 14.4 per cent EPS growth projected.

Domestic macro fundamentals remain broadly supportive. The RBI has cut rates by 125 basis points since February 2025, system liquidity is comfortable at 1.6 per cent of net demand and time liabilities, and GST reductions alongside income tax cuts have provided stimulus to consumption. Auto volumes — particularly two-wheelers and passenger vehicles — have rebounded on the back of these measures.

Emkay is overweight on Discretionary, Materials, Industrials and Real Estate sectors, while underweighting Financials, Energy, Healthcare, Staples, Telecom and Technology. It flagged commodity inflation as a serious headwind, noting that auto OEMs may need to raise prices by 4–5 per cent to offset rising input costs in Q1 FY27.

Published on May 19, 2026