Macquarie turns bullish: Sees Nifty at 30,000 by 2026 on earnings recovery

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Macquarie Capital has shifted to a more bullish stance on Indian equities, projecting the Nifty to reach 30,000 by 2026. This marks a significant turn from its cautious view over the past year. Aditya Suresh, Managing Director and Head of India Research at Macquarie Capital, said the outlook is improving with expectations of a meaningful rebound in corporate earnings. Suresh noted that market sentiment had been constrained by weak earnings trends. Fiscal year 2026 revenue growth has been running at about 5%, below nominal gross domestic product (GDP), along with margin pressure. He described the combination of “high valuations and no growth” as an ongoing challenge. Looking forward to fiscal years 2027 and 2028, Suresh said Macquarie’s bottom-up models point to a return to mid-teens earnings-per-share growth. “We’re feeling more optimistic and comfortable with where expectations are at,” he said, suggesting that foreign institutional investors could be drawn back to India after a period of limited participation. Valuations remain elevated, but Suresh believes strong domestic liquidity and renewed foreign flows could support further multiple expansion. “It’s almost as if the only clearing function is the initial public offering (IPO) site,” he remarked, indicating that demand for equities may exceed supply. On the IPO market, Suresh highlighted a potential concern: most stock supply continues to come from promoter and PE/VC exits rather than fresh capital for expansion. Even so, he expects market liquidity to sustain the current $20 billion annual IPO pipeline. Macquarie’s sector view is selective. Financials remain a core overweight, with private banks preferred over state-owned lenders. “Our analyst… is still more the private banks over the public sector banks,” Suresh said, mentioning HDFC Bank and ICICI Bank as top picks. He also sees opportunities in certain NBFCs and insurance companies. Beyond financials, Suresh cited the electronics manufacturing services sector as another area of interest, naming Dixon Tech as companies that combine growth with returns and cash generation.

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