Citi sees Indian equities rising, projects Nifty at 28,000 by end-2027

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Citi sees Nifty at 28,000 by 2027

Highlights

Citi Research projects Nifty 50 at 28,000 by end-2027, up about 12% from 24,986.4, after a sharp market rebound.
In November, foreign portfolio investors bought over $4.1 billion in Indian shares, marking the largest monthly inflow since September 2024.
Citi estimates a $10 per barrel oil price drop could reduce India's current account deficit by 30-40 basis points and inflation by 50 basis points.

Revised target follows sharp market rebound

As reported by Reuters, Citi Research says India’s benchmark Nifty 50 can reach 28,000 points by the end of 2027, implying about 12% upside from its last close of 24,986.4.

Indian equities have until recently lagged global peers as enthusiasm around AI-linked trades and elevated crude oil prices weighed on the outlook for the world’s third-largest oil importer. Citi’s more bullish view comes after the Nifty 50 rose more than 10% over the seven sessions through Friday, helped by renewed foreign portfolio investor interest as AI trades unwound and oil prices retreated.

In its India equity strategy note dated November 8, Citi says a roughly 100 basis point increase in India’s active weight could drive about $12 billion of inflows. The brokerage also raised its price-to-earnings multiple for the Nifty 50 to 18x from 17x, lifting its target from an earlier forecast of 26,000 by September 2027.

Oil and allocation shifts support outlook

Sentiment toward Indian equities improved after a Democratic victory in the U.S. midterm elections raised expectations of slower AI-related capital expenditure and lower oil prices, amid hopes for an end to the conflict involving Iran. Citi says the risk of a faster pace of data center moratoriums after the U.S. midterms has supported a rotation into other assets, a trend that could continue to benefit India.

Foreign portfolio investors have bought more than $4.1 billion of Indian shares so far in November, already marking their biggest monthly inflows since September 2024. Citi also says lower oil prices could improve India’s macroeconomic and earnings assumptions, estimating that a $10 per barrel drop in oil could reduce the current account deficit by 30 to 40 basis points and inflation by 50 basis points.

In our earlier article on India’s September merchandise trade deficit, we noted the gap widened to $30.21 billion as imports rose faster than exports. We highlighted that elevated crude oil prices were a key driver of the higher import bill, raising pressure on India’s external balance even as the country works to diversify export markets through new and expanding trade agreements.

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