{
  "id": 4842551,
  "title": "PL Capital raises Nifty target to 27,123, warns El Niño, inflation may curb broad-based rally",
  "url": "https://urgent.news/2026/09/01/pl-capital-raises-nifty-target-to-27-123-warns-el-nino-inflation-may",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-01T10:24:23.000Z",
  "source": {
    "name": "Hindu BusinessLine",
    "slug": "hindu-businessline",
    "url": "https://www.thehindubusinessline.com/markets/pl-capital-raises-nifty-target-to-27123-warns-el-nino-inflation-may-curb-broad-based-rally/article71414548.ece"
  },
  "original_language": "en",
  "account": "Broking firm PL Capital has revised its 12-month Nifty target upward to 27,123 from the previous level of 27,019. The brokerage acknowledges that El Niño, inflation, and commodity risks could dampen the broad-based market rally. Despite the near-term market volatility being expected to remain high, PL Capital remains optimistic about the medium-term outlook. This optimism is fueled by resilient domestic demand, robust credit growth, and improving liquidity.\n\nPL Capital's bullish scenario sees the Nifty reaching 30,137, while its bearish scenario projects it at 24,971. Currently, the Nifty trades at 17.3 times its one-year forward EPS, which is 11.7% below its 15-year average P/E of 19.6x. The brokerage estimates the index at a 10% discount to its 15-year average P/E based on FY28 EPS of ₹1,537.6.\n\nPL Capital's coverage universe, excluding Oil & Gas, recorded a 15.5% sales growth and a 17% profit after tax (PAT) growth in Q1FY27. EBITDA growth stood at 9.6%, while EBITDA margins declined by 148 basis points. However, PL Capital warns that higher commodity costs and supply-chain disruptions are starting to impact margins, with the full impact of higher-cost inventory expected to become more apparent from Q2FY27.\n\nThe brokerage identifies El Niño and the deteriorating monsoon situation as significant risks to inflation and demand. India's cumulative monsoon deficit has widened to around 14%, with 17-18 out of 36 meteorological subdivisions reporting deficient rainfall. A more severe El Niño could lead to higher prices for agricultural commodities like coffee, cocoa, palm oil, and soybean, which would put pressure on food inflation and consumption demand.\n\nPL Capital maintains an overweight position on banks, capital goods, diversified financials, metals, healthcare, telecom, and ports. It remains underweight on automobiles, consumer goods, and IT services, increasing its exposure to metals, capital goods/defence, NBFCs, asset management companies, telecom, and ports. The brokerage anticipates a potential 25 basis points rate hike by the end of Q3/Q4FY27, contingent on crude prices and geopolitical conditions. Credit growth is seen as a crucial support for the economy, with credit growth reaching 18.6% in June. FCNR mobilization is expected to provide an additional $70-80 billion of credit availability.\n\nAmnish Aggarwal, Co-Head of Institutional Equities at PL Capital, acknowledges the resilience of Indian equities amid a challenging external environment. However, he warns that higher raw-material costs, deficient monsoons, successive price hikes in essential goods, and elevated crude and commodity prices could weigh on consumption and earnings. Near-term volatility is expected to remain elevated, and investors should adopt a selective, stock-specific approach.",
  "summary": "The brokerage says the Nifty is currently trading at 17.3x one-year forward EPS, an 11.7% discount to its 15-year average P/E of 19.6x",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}