Bernstein Keeps Nifty Target at 26,000, Prefers Healthcare

Brokerage Bernstein retained a Neutral rating on Indian equities and kept its year-end Nifty 50 target at 26,000 in a research note by analysts Venugopal Garre and Arela. The target implies roughly a 10% upside from recent closing levels cited by the firm.

The analysts wrote that crude oil prices and corporate earnings will determine whether markets reach the 26,000 level. They added that a de-escalation in West Asia, including any agreement between the United States and Iran, could trigger a short-lived relief rally, while weak macro conditions, renewed earnings downgrades and a pickup in equity issuance could limit gains.

Bernstein identified crude as the key variable for market performance. A decline in crude toward $90 per barrel or lower would ease pressure on corporate profits, support government finances and help preserve capital expenditure plans. The note warned that sustained high oil would hurt India’s fiscal and current account positions and weigh on earnings growth.

The firm reported that earnings downgrades have resumed, with fiscal-year 2027 estimates trimmed by about 3% so far. Bernstein projects earnings growth of around 10% for FY27 among NSE200 companies under its coverage, down from a roughly 14% compound annual growth rate over the previous two years.

Sectors highlighted as vulnerable included discretionary consumption, utilities, information technology, building materials and automobiles, where recent performance left elevated expectations. Bernstein downgraded consumer staples and automobiles to Underweight, citing limited policy support, inflationary pressures and signs that auto demand may have peaked.

Bernstein adjusted other sector weights. Financials moved to Equalweight, with banks kept neutral and non-banking financial companies viewed with caution. The broader energy sector was shifted to Equalweight, while oil marketing companies were upgraded to Overweight on the view that the worst of crude-related pressures may be behind them.

Healthcare and real estate were the only sectors where Bernstein expected a genuine earnings acceleration. Healthcare could benefit from a favorable base after reporting 4–5% earnings growth in FY26, easing U.S. pricing pressure, lower tariff uncertainty and a weaker rupee. The firm described healthcare as a potential “resurgence” trade.

Industrials were noted for exposure to artificial intelligence and data-center infrastructure investment that may create winners within the sector. Bernstein retained an Overweight rating on information technology despite the sector’s weak performance this year; the Nifty IT index remains down more than 20% year to date.

The analysts identified market themes that could benefit if geopolitical risks fade: under-owned companies tied to global growth themes such as AI and data centers, globally exposed sectors including IT and healthcare, and a range of rebound trades. Bernstein emphasized that selective stock picking would be important as broad-based rallies become harder to achieve.

Overall, Bernstein kept a guarded view on the broader market and noted that progress to the 26,000 Nifty target will depend on the path of crude prices and the direction of corporate earnings revisions.