Nifty can rally to 28,615 by this December in Axis’ bull case scenario. Here’s why

Domestic brokerage firm Axis Direct expects Nifty to reach 28,615 by December this year in a bull case scenario, based on a 20.5x valuation. A revival in domestic private capex, backed by policy continuity, improving business confidence, political stability, fiscal discipline and a rural recovery, is expected to drive growth. Markets are also closely watching the global outlook under U.S. President Donald Trump, with tariff-related uncertainties expected to ease in 2026.

With Nifty earnings expected to sustain a 13%+ CAGR over FY23–28, this backdrop could attract fresh capital inflows into Indian markets and support a re-rating of valuations, strengthening the equity outlook.

In a base case scenario, Axis maintains the Nifty target at 27,220 for December, while remaining constructive on Indian equities, supported by strong macroeconomic fundamentals, sustained government capital expenditure, GST 2.0 reforms and an improving corporate earnings cycle. The brokerage has based the target on 19.5x December 2027E earnings.


The brokerage expects Nifty earnings to grow at 13% CAGR over FY23–FY28, led by financials, underpinning healthy medium-term market returns, and notes that geopolitical tensions, crude oil volatility and currency movements may create near-term volatility.

Axis Direct recommends investors maintain good liquidity (10-15%) to use any dips in a phased manner, amid market volatility, and build a position in companies where the earnings visibility is quite high, with an investment horizon of 12-18 months.

While extreme volatility has subsided as per India VIX, the market is not entirely out of the woods. Intermittent spikes may persist, especially given ongoing global uncertainties.

The near term outlook for the Indian economy and corporate earnings may witness increased volatility, driven by commodity price movements, global risk aversion, and foreign fund flows.

However, the medium-to-long-term outlook remains constructive, supported by domestic demand resilience, improving earnings visibility, and structural reforms.

Axis values Nifty at 16.5x in a bear case scenario, implying a target of 23,030 in December this year.

While valuations may remain above average amid potential policy shifts under the Trump regime, persistent inflation in developed markets and historically elevated interest rates increase downside risks.

Uncertainty around currency movements, oil prices, and global trade is likely to weigh on export-driven growth in 2026. Additionally, concerns over global growth, exacerbated by tariffs and geopolitical tensions, could compress market multiples in the near term.

Elevated Valuations
The Nifty is currently trading slightly above its long-term average valuation multiples (18.4x) and continues to command a premium over most emerging markets. The premium is supported by superior earnings growth, stronger corporate governance, macroeconomic stability and favourable demographic trends. However, elevated valuations imply that future market appreciation will increasingly depend on earnings upgrades rather than multiple expansion.

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Going forward, market performance is likely to be driven increasingly by sustained earnings growth, healthy free cash flow generation, improving ROCE and balance-sheet strength, rather than further valuation expansion. Companies that can navigate cost pressures while maintaining growth and generating consistent cash flows are likely to emerge as key outperformers through FY27. Axis continues to favour a bottom-up approach, with greater emphasis on quality growth companies having sustainable business models, pricing power, strong earnings visibility and execution capabilities.

In this environment, Axis Direct has maintained an overweight stance on BFSI, Telecom, Capital goods, Healthcare, Auto, Power & Energy, but it remains cautious on IT in the medium term, led by AI disruption.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)