What is Nifty’s real return potential till end-2026? Brokerage Bernstein explains

India’s benchmark Nifty 50 index could also be getting into a part of muted returns, with international brokerage Bernstein warning that elevated valuations and a possible slowdown in earnings progress may restrict upside over the subsequent two years.
In its newest word on Indian equities, Bernstein estimates that the Nifty is prone to ship returns of round 7.6 per cent by the top of 2026, signalling a moderation after the robust rallies seen in recent times.

The brokerage cautioned that draw back dangers stay evenly balanced. If earnings per share (EPS) progress slows to about 8 per cent yearly over the subsequent two years and valuation multiples contract to 18.5 instances, the Nifty may slide to round 24,800 implying a possible decline of roughly 5 per cent from present ranges.

Bernstein mentioned the first concern for traders is the market’s stretched valuation profile. Whereas company earnings proceed to develop, the brokerage believes that revenue enlargement might not be robust sufficient to justify current value multiples, making the market susceptible to valuation-led corrections.

Home liquidity and regular earnings have up to now supported Indian equities regardless of international uncertainties, together with geopolitical tensions and slowing progress in main economies. Nevertheless, Bernstein warned that these supportive elements might not be enough to drive robust, broad-based positive aspects over the medium time period.

The report suggested traders to mood expectations and undertake a extra selective method, specializing in firms with robust steadiness sheets, constant money flows, and pricing energy relatively than relying solely on index-level returns.

With valuations remaining elevated and earnings progress anticipated to normalise, Bernstein mentioned the Nifty is prone to ship average relatively than spectacular returns by way of the top of 2026.