Nifty could hit 27,000 once geopolitical tensions ease: Bajaj Finserv AMC CIO

The Nifty 50 is positioned to break to a new all-time high once geopolitical uncertainty clears and the fair value for the index currently is at 27,000, said Nimesh Chandan, Chief Investment Officer at Bajaj Finserv Asset Management.

Chandan said India's fundamental cycle — spanning economic growth, earnings growth, and credit growth — remains intact, and that the current slowdown is a speed breaker, not a structural reversal.

Chandan cautioned that the April-June 2026 quarter of the financial year 2026- 27 (FY27) earnings may see some downgrades, with Nifty EPS estimates potentially slipping from the current ₹1,230–1,240 range. However, markets will quickly pivot to FY28, where he projects 15% earnings growth, putting Nifty EPS in the ₹1,420–1,440 range. At that level, he argued, the market looks cheap and growth-oriented sectors will command premium valuations.

Consensus earnings estimates for FY27 have moved by just 1.5–2%, Chandan noted, calling the result season very good. He acknowledged that companies may flag higher input costs tied to energy and raw materials in Q1 due to elevated oil prices, but said the market will look through near-term noise once the macro overhang lifts.

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Bajaj Finserv AMC has not changed its core portfolio positioning. The fund continues to hold roughly half its equity allocation in cyclicals — financials, materials, and industrials — balanced against healthcare, defence, and selective consumption names.

Chandan said April was a kind month for the portfolio and that cyclicals outperformed. While a prolonged oil price spike may require stock-specific adjustments within certain sub-segments, the overall strategic tilt remains unchanged.

"When costs are going up, sometimes you see an unorganised to organised market share shift, sometimes you see market shifting from weak competitors to a stronger player," he said.

He identified construction, metals — both ferrous and non-ferrous — as a core long-term holding, anchored by two structural arguments. First, the world is shifting from a just-in-time to a just-in-case supply chain model, pushing countries and companies to hold strategic inventory in critical commodities. Second, energy-intensive technology transitions — AI infrastructure, data centres, and electrification — as a sustained driver of demand for copper and other rare earth metals. Supply additions across many of these commodities has been limited for years.

Cement is also on his watchlist. After a slow patch, the sector had begun to show double-digit volume growth before the current macro disruption. He also flagged construction contractors as trading at cheap valuations, though the universe of large, financially sound civil contractors in India remains narrow.

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In the fund's multi-asset portfolio, Chandan holds a positive view on both gold and silver. He noted that silver carries a higher beta relative to gold and flagged a historical pattern: when oil prices rise above $100 per barrel, both metals come under pressure as markets price in tighter global liquidity and higher interest rates. He said a West Asia resolution could trigger a bounce in both.

Chandan identified two headwinds in fixed income for Indian yields. US 10-year yields have risen to around 4.63%, and emerging markets (EMs) typically maintain a spread above that level, putting upward pressure on domestic rates. A depreciating rupee is also feeding into imported inflation. He flagged an El Niño forecast for August and September as an additional inflation risk for the second half of the fiscal year — a factor that makes near-term rate cuts less likely and keeps rates at an elevated range.

For the full interview, watch the accompanying video

Indian IT stocks valuations look cheap and recent rupee weakness provides some earnings support, he said and described current price action as a classic bottoming out process. He does not expect a sharp near-term re-rating and suggested that if an artificial intelligence (AI) valuation correction materialises in global markets, it could paradoxically support IT stocks on a relative basis.

He said the fund is selectively looking at companies that could benefit from higher prices as a hedge against El Niño risk, without taking a doomsday view on the monsoon or soft commodities. He added that he is not bullish on rural demand plays such as tractors or fertilisers at this stage.

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