Daily Voice: Nifty seen ending 2026 up 10-15%; no major Q4 disruption in base case, says Divam Sharma

Divam Sharma is the Co-Founder and Fund Manager at Green Portfolio PMS

• Expect Nifty to finish 2026 with 10–15% returns despite US–Iran tensions
• See no major disruption to Q4 earnings in current base case
• See opportunities emerging in manufacturing, defence, selectively in IT

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According to Divam Sharma, the Co-Founder and Fund Manager at Green Portfolio PMS, unless crude sustains significantly higher levels due to the US-Israel-Iran conflict, the impact on Indian corporates should remain limited, at least in the near term.

"We do not expect material disruption to Q4 earnings under the current base case scenario," he said in an interview to Moneycontrol.

Despite global cues and geopolitical tensions, he remains constructive and still expects the Nifty 50 to end 2026 with at least a 10–15% return.

In the current market correction, he sees opportunities emerging in manufacturing, defence, and, selectively, in IT, particularly among companies pivoting toward AI-driven services. "That said, this is not a blanket-buy environment," he said.

Are you concerned about the US–Israel–Iran tensions and their impact across asset classes, including equities?

Geopolitical tensions of this nature always create short-term volatility across asset classes, especially equities, crude oil, currencies, and safe-haven assets.

For India, we do not believe this will have a prolonged structural impact. However, a sharp spike in crude oil prices — particularly if sustained — can meaningfully affect India’s macro stability given our dependence on oil imports.

The key monitorable remains crude. If oil stabilizes, broader markets should absorb the geopolitical noise relatively quickly.

Given the ongoing Middle East tensions, do you see a high possibility of Brent crude futures surpassing $100 per barrel in the short term?

At this stage, we do not foresee Brent crude sustainably rising above $90 per barrel.

Global supply chains remain relatively diversified, and major oil-producing nations are unlikely to allow an uncontrolled price spike that disrupts global growth. Unless there is a direct and prolonged disruption to major shipping routes or production hubs, prices are likely to remain contained.

Do you think Iran’s refusal to meet US demands to curb its nuclear program is the sole reason behind the US and Israel’s attack on Iran?

The nuclear issue is an important factor, but the situation must be viewed through a broader geopolitical lens.

For Israel, this is primarily about national security and mitigating threats posed by Iran.

For the United States, however, the dynamics are far more strategic. This conflict also reflects the larger geopolitical and economic rivalry between the US and China. As the global economy transitions toward an AI-driven ecosystem, energy security is becoming increasingly critical. Control over energy supply chains — especially oil — strengthens geopolitical leverage.

In that context, the tensions extend beyond a regional conflict and tie into broader strategic positioning.

Could a prolonged war push central banks into a more complicated growth-versus-inflation trade-off?

Yes. A sustained rise in crude prices would complicate the policy environment.

Central banks may choose to remain cautious and delay decisive rate actions. They would need to balance inflationary pressures from higher energy prices against potential growth slowdowns.

In such scenarios, policy responses tend to become more gradual and data-dependent rather than one-sided.

 Do you expect the US–Iran tensions and potential oil supply shock to impact Indian corporate earnings and economic growth?

At this point, we believe the tensions are likely to settle over the next 1–2 months.

Unless crude sustains significantly higher levels, the impact on Indian corporates should remain limited, at least in the near term. We do not expect material disruption to Q4 earnings under the current base case scenario.

Despite global cues and geopolitical tensions, do you still expect the Nifty 50 to end 2026 with at least a 10–15% return?

Yes, we remain constructive.

Markets have already witnessed significant pessimism, and India is increasingly seen as a relatively stable macro destination. We have underperformed in recent months — both in markets and currency — which creates a more favourable base.

Domestic consumption remains resilient, and structural fundamentals are intact. However, the impact of AI on the global IT landscape — a key contributor to India’s economy — remains an important variable to watch.

Selectively, we believe Indian markets can generate meaningful returns for investors through the rest of FY27.

What would you advise buying during this correction?

We see opportunities emerging in manufacturing, defence, and, selectively, in IT, particularly among companies pivoting toward AI-driven services.

That said, this is not a blanket-buy environment. Stock selection will be critical. Investors should focus on balance-sheet strength, earnings visibility, and long-term competitive positioning rather than on broad thematic exposure.