Goldman Sachs has upgraded its view on Indian stocks from ‘neutral to overweight’, saying India’s growth story remains strong and that the Nifty 50 index could climb to 29,000 by the end of 2026 which is about 14% higher than current levels.
The global investment bank said India’s economy and corporate earnings are gaining momentum after years of slowdowns. It believes this trend will continue, supported by government reforms, lower interest rates, and healthy consumer demand.
According to Goldman, India’s policy environment is turning more supportive, with the Reserve Bank easing liquidity, tax reforms showing results, and fiscal discipline improving.
It also noted that domestic investors are driving the market, even as foreign investors have sold heavily this year. So far in 2025, foreign funds have pulled out nearly $17 billion, but local investors have pumped in around $70 billion, showing growing confidence in Indian companies.
Goldman Sachs expects the rally to be led by banks, consumer goods, automobiles, defence, and telecom stocks, while sectors like IT, pharma, and industrials may see slower growth.
The firm added that India’s stock valuations, though higher than other emerging markets, now look more reasonable given its growth prospects.