JP Morgan Retains Nifty 50 Target At 27,000 As India’s Q1 FY27 Earnings Growth Accelerates

JP Morgan has maintained its target of 27,000 for the Nifty 50 due to robust corporate earnings growth in the first quarter of FY27. The brokerage noted that this is the strongest earnings growth since June 2024. However, they are more optimistic about specific domestic cyclical stocks rather than the overall Indian market. Companies like Hitachi Energy, ABB India, and NTPC are expected to benefit from growing electricity consumption and increased demand from data centers.

Yet, some heavyweights such as ITC, Dr Reddy’s, Cipla, and IndiGo have negatively impacted profitability. JP Morgan also expects domestic inflows to stay strong despite equity market returns being muted. Earnings growth across the board showed improvement, with MSCI India companies reporting a 19% year-on-year increase in revenue and a 16% rise in profit after tax (PAT) during the quarter.

This was a significant improvement from the 10% earnings growth seen in the fourth quarter of FY26. EBITDA margins expanded by 10 basis points. The MSCI India companies exceeded expectations with a 58% beat-to-miss ratio, while IT and financial firms delivered the strongest positive surprises. Communication services and healthcare sectors, on the other hand, reported the largest disappointments.

The Nifty 50 exhibited a 20% revenue growth and a 12% PAT growth, with a beat-to-miss ratio of 64% to 20%. Corporate earnings strength was evident in large-cap stocks, with Nifty Midcap 100 and Nifty Smallcap 100 posting impressive 42% and 39% PAT growth, respectively. Domestic demand continues to be a key growth driver for companies, with power demand, infrastructure, grid spending, defense, automobiles, and consumer staples being important areas of structural growth.

Companies are now focusing on profitability over aggressive volume expansion, driven by disciplined pricing, margin protection, and maintaining annual guidance despite external uncertainties. JP Morgan forecasts MSCI India earnings to grow by 11% in CY26 and another 13% in CY27, providing a solid earnings foundation for Indian equities.