Goldman Sachs Upgrades India To ‘Overweight’; Nifty May Reach By 29,000 By 2026

Goldman Sachs has upgraded its stance on Indian equities to "Overweight," targeting a Nifty level of 29,000 by the end of 2026. This suggests a potential 14% increase from current levels. The bank's report, titled "Leaning In as Growth Revives; Raising India back to Overweight," highlights expected growth driven by supportive policies, earnings recovery, and renewed foreign investor interest.

Previously, in October 2024, Goldman Sachs had downgraded Indian equities due to high valuations and an earnings slowdown. However, this outlook has changed with the recent upgrade. The report notes that Indian equities have underperformed MSCI EM by 25 percentage points over the past year due to $30 billion outflows from foreign portfolios, marking the largest gap in two decades.

Factors Supporting Growth

The Reserve Bank of India's easing measures are expected to support growth. These include rate cuts, improved liquidity, and bank deregulation. Additionally, GST reductions and slower fiscal consolidation should boost domestic demand over the next two years. Corporate earnings for the September quarter exceeded expectations, leading to sector-specific upgrades.

Goldman Sachs forecasts MSCI India profits to grow from 10% in 2025 to 14% in 2026. This is anticipated due to a stronger nominal growth environment. The bank believes that financials, consumer durables, defence, technology, media and telecom (TMT), and oil marketing sectors will drive the next phase of market gains.

Consumer Demand Drivers

The report also identifies factors likely to support mass consumption and increase demand in consumer-related industries. These include low food inflation, a strong agricultural cycle, GST rate cuts, upcoming state elections, and potential wage increases from the 8th Pay Commission.

Recent trends indicate a shift in sentiment as valuations have cooled and foreign risk appetite improves. "We now see a case for Indian equities to perform better over the coming year," noted the report. This positive outlook reflects an anticipated revival in India's growth momentum. This article was initially uploaded on November 9th, 2025 at 4:27 PM.