SBI Securities expects Indian equities to stage a gradual recovery in Samvat 2083 after nearly two years of consolidation, with improving corporate earnings, strong domestic liquidity and reasonable valuations providing support despite persistent global uncertainties.
The brokerage believes the Indian market has built a strong domestic foundation even as external factors such as elevated crude oil prices, foreign investor outflows and currency weakness have weighed on sentiment. It expects equities to deliver better returns in the new Samvat, provided global conditions improve, particularly with a correction in crude oil prices.
Corporate earnings have emerged as a key source of optimism. The June quarter of FY27 saw broad-based improvement, with the Nifty50, midcap and smallcap segments reporting healthy earnings growth. The September quarter has also started on a strong note. In a sample of 240 companies, revenue grew 23.2 percent year-on-year, while profit after tax (PAT) rose 28.8 percent. Excluding banks and NBFCs, the 179 companies in the sample reported 24.5 percent sales growth and 38 percent PAT growth.
For the broader market, SBI Securities expects Nifty50 earnings per share (EPS) to grow 13.4 percent in FY27 to Rs 1,290, followed by 10.1 percent growth in FY28 to Rs 1,420. The brokerage believes sustained double-digit earnings growth across several businesses could support a recovery in equity markets.
Domestic institutional liquidity is another important pillar. Foreign investors have sold Indian equities worth Rs 3.6 trillion in the secondary market over the past 12 months, but domestic institutions have absorbed much of this selling, investing Rs 8.5 trillion during the same period. Monthly mutual fund SIP inflows have remained close to record levels of Rs 32,000 crore, while the number of demat accounts has crossed 24 crore. Domestic mutual fund ownership in the NSE500 also reached a record 12.2 percent in the June 2026 quarter, while FII ownership fell to a 17-year low of 16.2 percent.