Nomura lifts Nifty target price by 1,170 points, unveils 17 top stock picks
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In a bullish move that defies earnings downgrades and global jitters, Japanese brokerage giant Nomura has raised its Nifty target by 1,170 points to 26,140, citing favorable valuations and domestic resilience. Alongside, it unveiled 17 high-conviction stock picks , signaling a clear pivot toward domestic-facing sectors."Assuming benign risk premium and low yields, we raise the target valuation multiple to 21x (from 19.5x previously)... suggesting potential upside of 6% from current levels,' Nomura said in a note to clients. The firm's new March 2026 Nifty target is based on 21x FY27 earnings, up from its previous 24,970.The Nifty currently trades at 20.5x one-year forward earnings, near the top of its three-year range. Yet, Nomura points to a reassuring spread of -1.4% between earnings yield and bond yield — at the high end of the past four years — to argue that valuations remain justified.Despite cuts in aggregate earnings estimates, Nomura notes that 'there were more beats than misses' in India's Q4 season. Consensus FY26/27 earnings have been trimmed by 2.3%/1.4% since March 2025, and by 7.6%/6.3% since September 2024. For FY27, the brokerage sees further 4–8% downside risk.Nomura remains wary of macro headwinds such as weak capex, fiscal consolidation, shrinking household savings, and soft exports. However, it says these risks may be offset by falling oil prices, inflation and interest rates.Nomura is betting big on domestic demand and financials, advising investors to prefer consumption over investment themes, and to stay cautious on exporters and capex-heavy plays like IT, metals and cement.'We are most positive on financials as the segment faces relatively low earnings risk and presents valuation comfort,' Nomura said.It is also upbeat on consumer staples, autos, oil & gas, power, telecom, internet, real estate and select domestic healthcare. Within industrials, companies linked to power capex are in favor.Conversely, IT services, cement, metals and global exporters remain underweight, especially as global trade uncertainty and US tariff risks loom.Among largecaps, ICICI Bank State Bank of India (SBI), Axis Bank, Bajaj Finance Godrej Consumer , Mahindra & Mahindra (M&M), CG Power, Reliance Industries (RIL), and Tata Power top Nomura's buy list.Small and mid-cap favorites include Marico , Dixon, Uno Minda, Gland Pharma Lupin , MedPlus, Oberoi Realt,y and Dr Lal Pathlabs Federal Bank is out of the preferred list due to muted earnings growth, rising opex, and NIM pressure. In capital goods, Hindustan Aeronautics (HAL) is added for strong order visibility, while Bharat Electronics (BEL) is removed after a sharp rally.In IT, L&T Technology Services (LTTS) joins the least-preferred list over weak visibility in ER&D amid tariff concerns. Within metals, JSW Steel is dropped due to litigation risks, while Jindal Steel & Power is added for earnings upside from new capacities.In real estate, Oberoi Realty replaces Lodha on expectations of key project approvals.
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