What will support Nifty’s upward trajectory
According to the investment management company, Nifty’s upward trajectory is fundamentally supported by earnings expansion, with growth estimated at 10-13% for FY27. It expects a potential re-rating driven by easing geopolitical tensions, moderating crude oil prices, a strengthening rupee, and softer inflation outlook. These factors could enable the Reserve Bank of India (RBI) to hold interest rates steady and also support renewed FII inflows, it added.
OmniScience pointed out that in the last 25 years, Nifty 50 has delivered nearly 14.26% CAGR including dividends, highlighting a sustained long-term uptrend which was punctuated by sharp but relatively short-lived drawdowns, reflecting the underlying growth in earnings and liquidity support over time.
‘Market is significantly undervalued’
“Market is significantly undervalued and even at moderate earnings growth rate returns are likely to be quite rewarding for the long-term investors who can tolerate volatility,” said that firm’s CEO & Chief Investment Strategist Vikas Gupta.Sectorally, OmniScience said that banks are in their best shape in around 10 years, with gross non performing assets (GNPA) below 2.5%, CRAR around 17%, and PCR near 76.6%, indicating robust balance sheets. “This positions them to fund incremental credit of Rs 94 lakh crore without fresh equity. A sustained government and corporate capex cycle should drive multiyear credit growth and earnings visibility,” it added.
The investment management company meanwhile sees India’s power sector entering a structural S-curve, with renewables, storage, and green hydrogen driving a shift toward a near 74% installed capacity by 2035. The sector’s long-term growth story is underpinned by a Rs 65-70 trillion capex opportunity, backed by strong policy support. Rising electricity demand, which has the potential of triple, along with new-age consumption including EVs and data centres, further adds durable visibility to the sector, OmniScience said.
“We are overweight on banks, financial services, and the power sector, driven by strong earnings growth, healthy balance sheets, and significant capital allocation toward capacity expansion,” said Ashwini Shami, President and Chief Portfolio Manager of OmniScience Capital.
Buy or avoid IT stocks?
However, Shami remained cautious on IT stocks. “While we have traditionally been bullish on IT, the impact of AI on Indian IT remains uncertain, resulting in limited growth visibility over the medium term (2–3 years),” he said.In its press release, the company added that IT stocks remain at fair-to-elevated valuations relative to growth visibility, despite the recent corrections. Ongoing uncertainty around AI disruption and global tech spending warrants caution. “It may be prudent to wait for clearer demand trends and more attractive entry points before increasing exposure. While the valuation from the long-term view point looks attractive, the issue is with the near to medium term growth outlook,” the investment management company added.
“OmniScience Capital estimates the FY27 Nifty 50 EPS (earnings per share) to be around Rs 1,280 to Rs 1,320. With P/E multiples ranging from 22 to 24, the Nifty 50 is expected to be in the 28000 – 31000 range by the end of March 2027, implying a 15% to 25% upside from the current levels,” it said. The firm in a recent report had highlighted that markets could potentially deliver returns higher than the long term average return based on the historical analysis of index returns grouped by P/B buckets.
Founded by a team of IITians, OmniScience Capital claims to specialize in scientific, research-led investing with Rs 1,000 crore in client assets. It says that its investing framework in inspired by veteran market investors Benjamin Graham, Warren Buffett and Peter Lynch.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)