Bernstein Cuts Nifty 50 Target To 25,000 For December 2026

Global brokerage Bernstein has reduced its December 2026 Nifty 50 target to 25,000 from 26,000, citing weakening economic conditions, elevated crude oil prices and limited prospects for corporate earnings upgrades.

The revised target indicates a potential upside of approximately 8.1% from current market levels. However, Bernstein cautioned that a further 4-5% rally could push Indian equities beyond comfortable valuations, towards their recent average of 18.2 times forward earnings.

In an Oct 19 report, analysts led by Bernstein Managing Director Venugopal Garre based the revised target on a price-to-earnings multiple of 18 times FY28 earnings, assuming 9% growth over FY27.

LTCG Tax Cut Unlikely To Sustain FII Inflows

Bernstein said reducing long-term capital gains (LTCG) tax could support India's capital markets but would not independently attract sustained foreign institutional investor (FII) inflows.

The brokerage believes a meaningful recovery in economic growth and corporate earnings is essential to improving investor sentiment.

Garre warned that an initial rally following any tax reduction could prompt investors to sell existing holdings rather than increase their exposure.

Finance Minister Nirmala Sitharaman recently indicated that the government was willing to consider suggestions regarding LTCG tax during consultations ahead of the Union Budget.

Bernstein also sees limited opportunities for Indian equities to benefit from any temporary slowdown in global artificial intelligence investment.

Crude Oil Prices, Weak Earnings Cloud Nifty Outlook

Bernstein identified persistent geopolitical tensions, expensive commodities and supply-chain disruptions as major risks to India's economic outlook.

The brokerage expects limited additional policy support, while the benefits of goods and services tax (GST) changes could weaken as base effects emerge and prices increase.

Poor monsoon conditions and declining reservoir levels may also create economic challenges next year.

Meanwhile, rising bond yields, uncertainty surrounding a US trade agreement and risks linked to Russian oil imports continue to weigh on sentiment.

Bernstein said the prolonged geopolitical conflict had undermined its earlier expectations of a quick resolution, prompting another downward revision to its market target.

The brokerage believes India's recent strong economic performance may prove difficult to sustain without improvements in earnings, investment flows and broader macroeconomic conditions.