Goldman Sachs sees Nifty at 26,500 by June 2027 on return of foreign flows and domestic recovery

Global brokerage Goldman Sachs has turned positive on India, setting a June 2027 target of 26,500 for the Nifty, implying around 10 per cent upside from current levels, as it expects foreign institutional investor flows to return and domestic recovery to strengthen.

The brokerage said India’s outlook has improved on the back of lower commodity prices, a stable rupee and resilient growth. It added that ultra-light foreign positioning leaves ample room for overseas inflows to return to Indian equities.

Goldman Sachs expects a rotation in market leadership from growth to value stocks and from mid-cap companies to large-caps.

The brokerage said banks and large-cap stocks are likely to be key beneficiaries if foreign outflows reverse. It added that stable rupee conditions and bond inflows favour domestic sectors over exporters.

The brokerage has identified banks, utilities, tourism and defence as its preferred investment themes in the Indian market.

As part of its sector changes, Goldman Sachs upgraded utilities to overweight and raised industrials to market weight.

The brokerage downgraded staples to market weight from a more positive stance, while cutting metals and mining as well as cement to underweight.

Goldman Sachs retained its overweight stance on banks, energy refiners, technology, media and telecom (TMT), and defence stocks.

It maintained underweight ratings on IT exporters, pharma exporters and oil marketing companies and downstream oil businesses.

Goldman Sachs said a potential super El Niño could emerge as a headwind for rural-focused stocks but may act as a catalyst for power utilities.

The brokerage also said exporters and select material stocks are less favoured in the current environment, while domestic-facing sectors stand to benefit from a stable currency and improving capital flows.