Mumbai: India's benchmark Nifty 50 could climb to 28,000 by December 2027, supported by stronger corporate earnings, falling crude oil prices and a possible slowdown in global artificial intelligence (AI) investments, according to a report by Citi Research.
The brokerage's target indicates an upside of around 12 percent from the index's previous close of 24,986.40. Citi has also raised its earlier September 2027 target of 26,000.
Foreign Funds Return
Indian equities had underperformed global markets over the past two years as investors increasingly favoured AI-related stocks, while elevated crude prices weighed on India's economic outlook.
However, sentiment has improved sharply, with the Nifty gaining over 10 percent during seven trading sessions through Friday, supported by renewed foreign portfolio investor inflows and declining oil prices.
Citi estimates that a 100-basis-point increase in India's weight within actively managed global portfolios could attract approximately USD 12 billion in foreign investments.
AI Spending Shift
The brokerage believes a potential slowdown in global AI-related capital expenditure could encourage international investors to redirect funds towards emerging markets, including India.
Following the Democratic victory in the US midterm elections, expectations of restrictions on new data centres have strengthened hopes of reduced AI spending.
This shift could benefit Indian equities as investors seek opportunities beyond technology-heavy global markets.
Oil Price Advantage
Lower crude prices could provide another major advantage for India, which depends heavily on imported oil.
According to Citi, every USD 10 decline in crude oil prices could improve India's current account deficit by 30–40 basis points and reduce inflation by approximately 50 basis points.
Such developments could support corporate profitability, domestic consumption and broader economic stability.
The brokerage has also raised its expected Nifty price-to-earnings valuation multiple to 18 times from 17 times.
Citi believes improving earnings prospects, attractive valuations and renewed global investment flows could collectively support the index's journey towards 28,000 by December 2027.
