Nitin Bhasin of Ambit forecasts a sideways trajectory for the Nifty over the coming year amid geopolitical tensions, volatile oil prices, and rich valuations, signalling a shift towards selective investing and cautious optimism.
India’s equity market is entering a less exuberant phase, according to Nitin Bhasin of Ambit, who expects the Nifty to move largely sideways over the next year as earnings growth, valuations and foreign flows all cool from earlier highs. In an interview with Business Standard, Bhasin said investors should not expect much more than low-single-digit returns from the benchmark, arguing that the market is already digesting a mix of geopolitical tension, crude price volatility and a growing pipeline of stock supply.
Bhasin said the Nifty is likely to trade in a broad range and could end up little changed over 12 months, with overall returns of about 0% to 7%. He sees earnings growth holding up, but only modestly. For the Nifty 100, he expects growth of roughly 12% to 13% in FY27 and FY28, with the broader Nifty 200 potentially doing a little better. Even so, he argued that rich valuations mean share prices may lag profits, especially if oil-related pressures and other external shocks persist.
The Ambit executive was also sceptical that the market has fully absorbed the risks already visible. He pointed to West Asia tensions, swings in crude prices, what he called “Trump tantrums”, and the continued flood of paper in India as the main headwinds. While he said investors have taken some of those concerns on board, he added that mid-cap and small-cap shares still look buoyant, helped by strong demand for new listings and the belief that many businesses can keep raising capital.
That optimism, however, may not be evenly distributed. Livemint reported that Bhasin sees market multiples at the expensive end of their recent ranges across large-cap, mid-cap and small-cap segments, leaving little room for broad-based gains. He has previously warned that a bottom-up approach will matter more in the months ahead, as stock-specific performance is likely to diverge sharply from index-level returns.
He also downplayed concerns about the rise in initial public offerings that are dominated by existing shareholders cashing out. Bhasin said this reflects a more mature capital market, one in which founders, private-equity investors and venture capital backers are increasingly able to exit. He noted that Indian fundraising has evolved from financing expansion and debt reduction to accommodating a wider range of objectives, including acquisitions, and said the willingness to fund such deals shows that domestic appetite for capital has deepened.
But he drew a clear line between healthy market breadth and speculative excess. While he does not think the broader mid- and small-cap space is in bubble territory, he said there are pockets where valuations and narratives are stretching too far, especially in newer economy themes where earnings visibility remains limited. In his view, any bubble would have to be judged on valuations, earnings support and the strength of the underlying theme, and some areas are already starting to look vulnerable.
Bhasin was equally firm on the role of foreign investors. He said the era when overseas funds chased Indian equities with enthusiasm is over, and that domestic flows now dominate the market. Foreign investors are still active, he said, but they are more selective and increasingly looking for scalable businesses rather than broad exposure to India as a whole. He added that global money has other destinations drawing attention, including the US, Japan, Europe, resource-rich emerging markets and China, with Hong Kong serving as a proxy for renewed interest in Chinese assets.
For India, that means foreign participation remains important but less energised than in the past. Bhasin said the country is still too large to ignore, yet it is no longer among the world’s most exciting markets for international investors. They are still buying Indian companies, he said, but they are also selling more than they are buying, leaving them with a net negative position.
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