ICICI Securities’ Pankaj Pandey Sets Nifty Target at 29,500 for Next 12 Months

Pankaj Pandey, head of research at ICICI Securities, believes Indian equity markets are positioned to deliver healthy double-digit returns over the next 12 months, supported by a revival in earnings growth and a policy environment that is turning increasingly supportive of consumption and investment.

Pandey has set a 12-month target of 29,500 for the Nifty 50 and 98,500 for the Sensex, reflecting confidence that the current phase of consolidation is laying the groundwork for a stronger upcycle. In his view, India’s macro fundamentals remain among the strongest globally, even as geopolitical risks and trade-related uncertainties continue to create intermittent volatility.

He points to a combination of falling inflation, lower interest rates and sustained government spending as a powerful backdrop for equities. Inflation is hovering near multi-year lows, policy rates have already been cut sharply, and public capital expenditure remains robust, with a significant portion of the annual target already achieved. Recent tax reforms such as higher income tax exemptions and potential GST rate rationalisation are expected to translate into stronger household spending, which could reinvigorate the broader investment cycle.

Pandey sees corporate earnings as the key driver of market performance going forward. According to his estimates, Nifty earnings per share could grow at a compound annual rate of around 15% between FY26 and FY28, with telecom, banking, financial services and capital goods leading the charge. Mid- and small-cap companies, he adds, may see even faster earnings growth, though investors should remain selective given valuation dispersion within these segments.

Sectorally, he remains constructive on BFSI, IT, capital goods and real estate, citing improving balance sheets, operating leverage and policy tailwinds. Bank of Baroda and KPIT Technologies feature among his preferred long-term picks, reflecting confidence in both traditional financial intermediaries and technology-driven exporters.

While foreign portfolio investors have periodically reduced exposure in the secondary market, Pandey notes that overall foreign capital flows into India remain resilient through private investments and the primary market. He argues that as returns from global equities and commodities normalise after strong runs, domestic equities could re-emerge as a preferred destination for incremental capital.

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Pandey, however, tempers his optimism with caution. Ongoing geopolitical tensions, uncertainty around global trade and tariffs, and external shocks remain potential headwinds. Even so, he believes India’s combination of policy support, earnings momentum and macro stability offers a compelling risk-reward equation for long-term investors heading into 2026.