Goldman Sachs Upgrades India to ‘Overweight’, Projects Nifty at 29,000 by 2026

New Delhi — Global investment bank Goldman Sachs (GS) has turned bullish on India’s equity markets, upgrading its rating to “Overweight” and setting a Nifty 50 target of 29,000 by end-2026, signalling a potential 14% upside from current levels.

In its latest report, titled “Leaning In as Growth Revives; Raising India back to Overweight,” Goldman Sachs said it expects India’s growth momentum to accelerate, supported by pro-growth fiscal and monetary policies, a recovery in corporate earnings, and renewed foreign investor interest.

The move reverses the investment bank’s October 2024 downgrade, which was based on concerns over high valuations and slowing earnings growth.

According to the report, Indian equities have underperformed the MSCI Emerging Markets Index by 25 percentage points over the past year — the largest gap in two decades — largely due to $30 billion in foreign portfolio outflows. However, Goldman Sachs now sees a turnaround in sentiment, with valuations becoming more attractive and global risk appetite improving.

“We now see a case for Indian equities to perform better over the coming year,” the report stated.

The bank expects India’s growth to be fueled by the Reserve Bank of India’s accommodative stance, including rate cuts, enhanced liquidity, and gradual deregulation, coupled with GST rate reductions and a measured fiscal consolidation path. These measures, it said, should strengthen domestic demand over the next two years.

Corporate earnings for the September 2025 quarter came in stronger than anticipated, prompting upward revisions in several key sectors. Goldman Sachs forecasts MSCI India earnings growth to accelerate from 10% in 2025 to 14% in 2026, supported by robust nominal GDP expansion.

The investment bank expects the next leg of market gains to be led by companies in the financial services, consumer durables, defence, technology, media, and telecom (TMT), and oil marketing sectors.

It added that low food inflation, a healthy agricultural cycle, GST reductions, state election spending, and a possible 8th Pay Commission wage revision could further boost mass consumption, benefiting consumer-driven industries.

With inputs from IANS