ICICI Securities predicts Nifty bull case target at 28,100 by March 2026; here are its top stock picks

ICICI Securities predicts Nifty bull case target at 28,100 by March 2026; here are its top stock picks

A recent correction in Indian equities and a 6% earnings downgrade over the past five months have pulled Nifty50 valuations back to more reasonable levels (20x forward PE), even as the 10-year Indian bond yield dips to 6.4%, offering a valuation cushion, mentions ICICI Securities in its latest research report.

Despite global headwinds, the brokerage remains optimistic on domestic demand-driven plays and sees room for India to gain export market share in global manufacturing.

In its latest strategy note, ICICI Securities outlines a constructive but cautious view on Indian equities, pegging the Nifty50 base case target for March 2026 at 26,000, implying 8% upside. The bull case sees the index hitting 28,100 (17% upside), while the bear case assumes a steep slide to 20,000 (17% downside), driven by global recession risks and equity de-rating.

Top stock picks at this juncture include Axis Bank, Maruti Suzuki, Ultratech, Tata Steel, L&T, Sun Pharma, GAIL India, Solar Industries, JSW Energy, Tata Communications, and Archean Chemicals, reflecting a tilt toward domestic demand themes and manufacturing beneficiaries.

Crossroads of opportunity amid crisis

Unlike past crises like the Global Financial Crisis (GFC) or the Covid-19 shock — which offered no room for policy maneuvering — the current global scenario, driven by tariff escalation, presents “exit options”, mentions a note by ICICI Securities. If common sense prevails and US-led tariff hikes are rolled back or moderated via negotiations, markets may avoid the worst-case macro-outcomes.

In this base case, India may emerge stronger. The US has proposed significantly higher tariffs on China, Mexico, and Canada, while keeping hikes on others — including India — relatively moderate. That could shift market share toward Indian exporters in areas like chemicals, textiles, and machinery, where overlap with Chinese exports is high.

Exports to the US contributed nearly 18% to India’s total outbound trade in FY24. ICICI Securities notes that key sectors such as gems and jewellery, apparel, electronics, and engineering could either benefit or suffer based on how the US tariff regime unfolds.

Differential tariff structures, especially if the US selectively imposes higher duties on China and its North American partners, while keeping India in the lower bracket, could materially improve India’s export competitiveness in machinery, chemicals, textiles, and engineering goods—segments where Indian and Chinese exports to the US significantly overlap.

For example, Indian textiles face US tariffs of up to 28.2%, while Chinese counterparts often face even higher rates. Meanwhile, Indian tariffs on US textiles remain elevated, suggesting room for negotiation and balancing via bilateral deals.

Similarly, in pharmaceuticals and gems & jewellery, US tariffs on Indian products are still relatively benign compared to Indian tariffs on US goods—pointing to a strategic lever India could use to gain share or negotiate reciprocal access.

In 2022, 46% of China’s exports to the US were machinery, compared to 14% for India, leaving room for expansion if tariff differentials widen.

ICICI Securities further lays out sector-specific strengths in India's manufacturing base, identifying areas with both scale and export orientation. These include transport equipment, iron and steel, chemicals, and machinery, all of which have witnessed double-digit output growth over the past decade. The brokerage notes that tariff-driven shifts could encourage fresh FDI into these segments, if India’s trade terms improve.

This aligns with New Delhi’s push for ‘China + 1’ manufacturing strategies, with policy support for electronics, semiconductors, and defence sectors. Stocks like Tata Motors, Maruti Suzuki, JSW Steel, and Divi’s Labs could be among the long-term structural beneficiaries.

On the domestic front, recent fiscal and monetary stimulus could provide further momentum. A notable shift in banking system liquidity from deficit to surplus is attributed to measures like CRR cuts and RBI’s forex interventions. Meanwhile, the Rs 1 lakh crore direct tax rebate in Budget FY26 is expected to support consumption from April onward.

However, the bearish scenario remains a real threat. A retaliatory spiral in global tariffs, leading to economic contraction and inflation, could trigger a twin blow of growth slowdown and valuation compression. In such a scenario, India too may feel the heat through a dip in exports, remittances, and FDI.

While broader market valuations have cooled, ICICI Securities flagged concerns around mid- and small-cap segments, which still trade at a premium despite the recent correction. The Nifty forward PE is at ~20x, but there remains "zero margin of safety" in smaller names where earnings expectations are high and liquidity can turn quickly.

This suggests investors should stay anchored in large caps with earnings visibility, especially those exposed to domestic consumption, banking, and manufacturing—sectors likely to be less vulnerable to external shocks.

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