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Citi Predicts Nifty at 26,000 Amid Reasonable Valuations and Resilient Earnings
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CNBC TV18•16-10-2026, 11:27
Citi Predicts Nifty at 26,000 Amid Reasonable Valuations and Resilient Earnings
- •Citi maintains its target of 26,000 for the Nifty, driven by mid-teen earnings growth and more reasonable market valuations after a recent correction.
- •The Indian equity market is currently trading at around 17 times earnings, which is roughly one standard deviation below its 10-year average.
- •Citi remains cautious on the IT services sector due to structural challenges such as intense competition, AI-driven productivity gains, and slower revenue growth.
- •Private sector banks and healthcare, especially hospitals, are favored by Citi due to attractive valuations, healthy fundamentals, and sustained demand.
- •Citi expects two more rate hikes from the Reserve Bank of India, subject to inflation and broader macroeconomic conditions.
Key Questions Answered
Citi expects the Nifty to reach 26,000, supported by resilient mid-teen earnings growth, stronger-than-expected corporate performance, and more reasonable market valuations that are roughly one standard deviation below their 10-year average.
Citi remains cautious on IT services due to structural challenges including intense competition, AI-led productivity gains, increasing adoption of Global Capability Centres, slower revenue growth, and a stabilising rupee that could reduce margin support.
Outside of technology, Citi continues to favor private sector banks, which offer attractive valuations and healthy fundamentals, as well as healthcare, particularly hospital chains benefiting from low healthcare penetration and sustained demand.
