UBS sees Nifty at 27,500 in 12 months, driven by earnings growth

UBS remains upbeat on Indian equities, with Hartmut Issel, Head of APAC Equity at UBS Global Wealth Management, projecting the Nifty to rise to around 27,500 over the next 12 months—an upside of 11–12%.

The projection is based on expected earnings growth of about 13%. Issel said that while valuations are not particularly cheap, they are still manageable in an environment where bond yields are expected to fall below 6% by mid-2026, providing support to equity markets.

Another key factor driving optimism is the upcoming 8th Pay Commission, which is expected to boost consumer demand. According to UBS estimates, this could increase gross domestic product (GDP) by just over one percentage point over the next two years. “It only happens every five years,” Issel stated, calling it a meaningful earnings trigger, especially for consumer-facing sectors.

UBS expects double-digit earnings growth for Indian companies over the next two years. Following a strong 25% growth in 2023-24 (FY24), a reset to about 7% growth in the latest fiscal year creates a low base, making it easier for companies to outperform going forward. “If I compare myself with 7%… that’s much easier to beat,” Issel explained, adding that the earnings cycle could pick up across financials and consumption by 2026-27 (FY27).

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Issel clarified that UBS’s optimism isn’t based on the ongoing US-India trade discussions. “It’s not no longer so much for trade reason,” he said, suggesting that markets may have already priced in expectations on that front.

That said, UBS does expect India to announce an interim trade agreement with the US before July 9. “It will not be the final deal… but that interim is reached before July 9, and that’s… a given,” Issel stated, hinting at recent diplomatic momentum between the two countries.

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For the entire interview, watch the accompanying video

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