Goldman Sachs Upgrades Indian Stock Market to ‘Overweight’; Sees Nifty 50 at 29,000 By 2026

Global investment firm Goldman Sachs has revised its outlook on the Indian stock market, upgrading it to "Overweight" from its previous "Neutral" rating. This bullish stance is accompanied by a Nifty 50 target of 29,000 by December 2026, suggesting a potential upside of approximately 14% from the current levels.

The upgrade, announced on Monday, November 10, 2025, comes just over a year after Goldman Sachs downgraded Indian equities to "Neutral" in October 2024, citing concerns about high valuations and a slowdown in earnings. The firm's renewed confidence is underpinned by expectations of a revival in India's growth momentum, supported by easing monetary and fiscal policies, an anticipated rebound in corporate earnings, and a resurgence of foreign investor interest.

Several factors have contributed to Goldman Sachs's positive outlook. The Reserve Bank of India's (RBI) easing measures, including potential rate cuts, improved liquidity, and bank deregulation, are expected to stimulate domestic demand over the next two years. Targeted Goods and Services Tax (GST) reductions and a slower pace of fiscal consolidation should further aid economic recovery.

Goldman Sachs believes that the prolonged earnings downgrade cycle, which lasted longer than the median, has stabilized, with recent quarters showing better-than-expected results. The firm projects MSCI India's profits to increase by 10% in 2025 and 14% in 2026, fueled by improved nominal growth and corporate cost optimization.

While Indian market valuations remain elevated at around 23 times price-to-earnings, Goldman Sachs suggests limited downside risk, citing six different valuation approaches. The relative valuation premium compared to Asia has also moderated. The brokerage firm employed various valuation models to assess the positioning of India's equity market and found that the existing premium is justified by the country's strong earnings resilience and long-term growth potential.

In its report, Goldman Sachs highlighted specific sectors expected to drive the next phase of market gains. Financials, consumer staples, defense, and oil marketing companies (OMCs) are identified as key themes for investors. The investment bank is also positive on industries such as consumer goods, technology, media, and telecommunications. Conversely, the firm maintains an "Underweight" rating on pharmaceuticals, information technology, industrials, and chemicals.

The upgraded outlook from Goldman Sachs is anticipated to boost investor confidence and potentially attract foreign capital back to the Indian market. This could exert upward pressure on stock prices and indices like the Nifty 50.

However, Goldman Sachs also acknowledges potential risks to its bullish scenario. These include possible earnings shortfalls, external headwinds, and investor uncertainty surrounding the impact of artificial intelligence (AI) on business models. Other factors that could potentially derail the momentum and rally include a spike in global risk aversion, unexpected increases in food prices, a sharper-than-expected slowdown in the US economy, broadening tariffs, or a sharp rally in crude oil prices.

Despite these risks, Goldman Sachs's upgrade signals a significant vote of confidence in the Indian stock market's prospects. The firm's Nifty 50 target of 29,000 by December 2026 suggests that India's equity market may soon regain momentum if growth stabilizes and foreign flows return.