Nifty 50 Could Reach 34,000–35,000 in Three Years on Earnings Growth, Consumption Boost: Report

Nifty 50 Could Reach 34,000–35,000 in Three Years on Earnings Growth, Consumption Boost: Report​

Earnings Expansion and Economic Momentum Expected to Support Index Growth​

New Delhi, March 16: India’s benchmark equity index Nifty 50 could climb to the 34,000 to 35,000 range over the next three years, supported by steady earnings growth, stronger domestic consumption, and continued expansion in banking credit, according to a report released on Monday.

The report from investment platform smallcase highlighted that sustained investments in infrastructure and manufacturing are likely to strengthen corporate profitability and support the index’s long-term trajectory.

Nifty EPS Expected to Rise Through FY29​

The report projected a gradual rise in the Nifty 50’s earnings per share (EPS) over the coming years. Earnings are estimated to reach ₹1,281 in FY27 and increase to ₹1,463 in FY28.

By FY29, the index’s EPS is expected to move further to a range of ₹1,650 to ₹1,700, reflecting continued growth in corporate earnings across sectors.

If the index maintains its current valuation multiple of about 20.9 times earnings, the projections could translate into a compound annual growth rate of roughly 12.8% to 14% during the period.

Mid-Cap Stocks Outperform Large-Caps Over Four Years​

The report noted that mid-cap companies have been the strongest performers in the Indian equity market over the past four years, outperforming both small-cap and large-cap peers.

Mid-cap stocks recorded a compound annual growth rate of about 18.4% during the period. In comparison, small-cap stocks delivered a CAGR of approximately 13.4%, while large-cap companies generated around 9.8%.

Overall, Indian equity markets delivered a CAGR of about 12.7% during the last four years despite global markets facing several geopolitical shocks.

Market Resilience During Global Geopolitical Shocks​

According to the report, geopolitical developments during the period triggered short-term corrections of roughly 2% to 8% in the Indian market. However, these declines were generally followed by swift recoveries within weeks.

The resilience has been supported by the strength of the domestic economy, improving corporate earnings, and rising participation from retail investors in the stock market.

Sectoral Trends: Defence, Oil and Manufacturing in Focus​

The report also highlighted sectoral trends that have benefited from recent global developments.

Defence and aerospace companies have gained momentum due to rising geopolitical tensions, increasing global defence spending, and stronger domestic procurement initiatives.

Oil and gas producers have historically performed well during periods of geopolitical crises, supported by supply disruptions and rising crude oil prices. Commodity-linked sectors such as metals and mining have also witnessed phases of outperformance during supply constraints and commodity price rallies.

Meanwhile, manufacturing and capital goods companies are becoming increasingly important as global supply chains undergo structural shifts.