Global financial services firm Citi has maintained a constructive outlook on Indian equities, setting a Nifty 50 index target of 26,800 for June 2027. The target is based on an 18x one-year forward price-to-earnings multiple, according to the brokerage's latest market assessment.
The positive stance is supported by recent corporate earnings data. According to Citi, BSE100 EBITDA and Profit After Tax (PAT) growth registered year-on-year increases of 6 per cent and 9 per cent, respectively. These figures came in well above initial preview estimates. Furthermore, top-line growth excluding the energy sector stood at 14 per cent year-on-year, also beating forecasts.
Despite the overall healthy performance, the brokerage noted that margin pressure remains visible across several sectors, including consumer, industrial, and financial segments. However, earnings estimates for FY27 and FY28 have remained unchanged since July, indicating stability in broader profit projections.
Citi highlighted several domestic factors that could act as positive drivers for Indian equities moving forward. These include potential tailwinds from the Goods and Services Tax (GST), wage hikes, and ongoing credit growth in the economy. At the same time, the firm cautioned investors by flagging potential risks, specifically pointing to the productivity impacts of artificial intelligence (AI) and elevated crude oil costs.
In terms of sector preferences, Citi is currently favoring financials, telecom, healthcare, and utilities. Conversely, the brokerage maintains an underweight stance on IT services, consumer staples, and metals.
"Citi's projection reflects steady confidence in the structural growth of Indian equities, supported by resilient corporate earnings and credit expansion. While tailwinds like GST and wage hikes offer positive momentum, businesses and investors must carefully navigate external variables such as crude oil prices and technological shifts like AI productivity. A sector-selective approach, favoring structurally strong segments like financials and healthcare, remains prudent in the current economic environment." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
