Goldman Sachs Downgrades Indian Equities, Cuts Nifty 50 Target By 14%

Goldman Sachs has downgraded Indian equities to ‘marketweight’ from ‘overweight’, along with slashing the Nifty 50 target for the next 12 months by 14 percent.

The global investment banking firm cited India’s worsening macroeconomic conditions and a looming earnings downgrade cycle behind the decision.

It has reduced its 12-month Nifty target to around 25,300–25,900, which was earlier pegged at around 29,300–29,500, a cut of almost 14 percent.
The brokerage said the target cut reflects a less attractive risk-reward opportunity compared to other Asian markets, even as global and domestic headwinds intensify.

The brokerage also expects a downward revision in corporate earnings estimates over the next two to three quarters, particularly in sectors linked to domestic consumption and investment.

It has cut its earnings growth forecasts for India to 8 percent for 2026 and 13 percent for 2027. The figures are significantly lower than earlier projections.

The key reason behind the downward revision is the steep rise in energy prices due to the ongoing United States-Israel-Iran war in the Gulf region.
Oil prices have jumped by almost 60 percent since the start of the war in late February, from around $68 per barrel to $108 per barrel on Friday.

Given India’s import dependence, higher-for-longer oil prices could impact its macroeconomic outlook, the brokerage said. India depends on imports to meet over 80 percent of its oil and gas needs.

A large part of that demand is met through supplies from the Middle East, which is affected by the war. The brokerage anticipates a reduction of 9 percent in India’s full-year earnings growth if oil prices increase by $45 per barrel over three months.

Goldman Sachs has already lowered India’s growth forecast for 2026 to 5.9 percent, compared to its pre-war estimate of 7 percent. It has also raised the inflation forecast for the year from 3.9 percent to 4.6 percent, an increase of 70 basis points.