Gaurav Bhandari, CEO of Monarch Networth Capital, expressed optimism about a potential recovery in the Indian stock market, highlighting that the Nifty index, currently trading near 24,000, is down over 8% year-to-date. The index peaked at 26,373 on January 5, 2026, and has seen a 4% decline over the past year. Bhandari noted that the current correction is valuation-driven rather than based on fundamentals, with corporate earnings for the Nifty 500 growing by 15.6% in FY26.
Attractive Valuations
Bhandari pointed out that the Nifty is trading at approximately 20 times trailing price-to-earnings (PE), below its five-year median of 22 times. This suggests that investors are closer to the bottom of the index's 52-week range of 22,182 to 26,373. He emphasized the importance of maintaining disciplined investment strategies, such as continuing systematic investment plans (SIPs) and focusing on high-quality companies with strong cash flows.
In a similar vein, Rahul Bhuskute, Chief Investment Officer at Bharti AXA Life, stated that the core growth drivers of the Nifty remain attractive. He mentioned that the one-year forward PE is nearly 20 times, which is below the long-term 10-year average of about 21 times, offering a margin of safety for investors. Bhuskute noted that despite geopolitical tensions, corporate India has shown resilience, and he expects EPS growth of 15-16% for FY27.
Geopolitical Concerns
Both experts acknowledged the potential risks posed by rising global bond yields and geopolitical conflicts, particularly the US-Iran situation, which could impact liquidity and lead to foreign institutional investor (FII) outflows. Bhuskute highlighted that any de-escalation in tensions could trigger a significant market rally, reinforcing the need for investors to remain vigilant.
The current market dynamics suggest that Indian equities, particularly the Nifty, could face pressure from global liquidity tightening and geopolitical instability. Investors should monitor bond yields and geopolitical developments closely, as these factors could influence market sentiment and valuations. Watch for upcoming earnings reports that may provide further insights into corporate performance amid these challenges.