Expert view: Nifty 50 may scale a new high by the end of 2026, says MD, CEO of SBI Securities

Expert view: Baldev Prakash, MD and CEO of SBICAP Securities (SBI Securities), believes Nifty 50 may rise to a new high by the end of 2026, due to a combination of factors, including earnings growth and strong domestic flows. In an interview with Mint, Prakash shares his views on the Indian stock market, sectors he is positive about, and his expectations for the interest rate trajectory this year. Edited excerpts:

At SBI Securities, we have constructive view on Indian equities underpinned by (a) likely double-digit earnings growth for Indian corporates during FY26-FY28E period backed by comfortable valuations, post 21 months of consolidation, (b) discounting of multiple overhangs like trade disruptions led by US import tariffs and volatility in the energy prices on the back of West Asia crisis, (c) strong underlying consumption trend as reflected in the robust auto sales numbers and healthy demand traction across hotels, jewellery, food and beverages sector, etc., (d) strong inflow of bank deposit through FCNR route which has alleviated pressure on USDINR, (e) strong domestic flows through SIP route which has been able to absorb persistent selling pressure from FIIs, and (f) likely reversal of global AI trade by FIIs towards well diversified emerging markets like India.

During 2026, we expect many sectors to close on a positive note with Nifty 50 likely to scale new highs during the fag end of the year, backed by a handsome recovery in heavyweight sectors like banking and IT, etc.

Wealth creation through equities is the game of discipline and patience. Equity markets always work in cycles wherein 3-4 years of good returns are followed by a period of consolidation. Having said that, market returns are a mirror of corporate earnings growth, and with India’s nominal GDP growth likely to be 11-12%, we expect Indian corporates to deliver profit growth of 12-13%.

Investors can expect similar returns in the long run-in equities. Smart investors who are active in the market tend to outperform by participating in the relatively faster-growing undiscovered businesses. After coming out of the ferocious rally post-COVID, the last 21 months have been tough for Indian equity market participants, especially for those who have witnessed a correction for the first time.

Lesson for new-to- market investors is to have control over greed and fear as markets always swing like a pendulum with extreme optimism at one end and pessimism at the other end. Market participants should be aware that staying invested in the fundamentally sound businesses and protecting the capital is the mantra to survive in the market in the long run.

We always advocate for our clients to have a proper asset allocation plan with exposure towards equities, fixed income instruments and precious metals, depending on the age and risk profile.

Depending on the age and short-term life goals, investors are advised to allocate 20-40% of the liquid financial portfolio towards fixed-income instruments like government bonds.

Key themes that are likely to outperform over the medium term include auto (two-wheelers and passenger vehicles), auto ancillaries, select private and public sector banks, NBFC, defence, precision engineering, capital market-linked businesses (wealth management, AMCs, exchange, discount brokers, etc.), value-added metals and metal products, select chemicals (fluorine, battery chemicals, etc.), healthcare (hospitals, formulations and CDMO), cables and wires, consumption (jewellery, liquor, hotels, etc.), and EMS, etc.

These sectors are supported by favourable structural growth drivers, strong earnings visibility, healthy balance sheets and long-term domestic demand trends. In a nutshell, wealth creation opportunities exist across all the cohorts of the market, and investors are recommended to adopt a bottom-up stock-specific approach.

Emerging sectors like circular economy/recycling, semiconductor, data centre ancillary, battery chemicals, aerospace, ...