Chandan sees Nifty 27,000 fair value on accelerating profits and credit growth, but warns food inflation and monsoon are the next stress test for sentiment.
Bajaj Finserv AMC chief investment officer Nimesh Chandan projects Nifty fair value at 27,000, anchoring the call in a multi-cycle framework rather than a single multiple. The target, disclosed in a conversation with Mint, arrives while the index trades less than 10% below its peak and retail sentiment stays anxious. For traders, the number itself matters less than the transmission path Chandan lays out: a sequenced recovery across economic, profit, and credit cycles that has not yet been fully priced because the sentiment cycle is lagging.
Chandan derives the 27,000 level from a combination of valuation ratios, treating it as fair value under the assumption that India’s growth advantage persists and corporate profits accelerate. The roadmap turns on three of four cycles he monitors.
The profit cycle is already showing acceleration; Chandan points to a projected profit pick-up that extends from FY25 through FY27. On the credit side, systemic growth has jumped from the 9–10% range that prevailed a year ago to close to 16% now. Both figures provide the hard-data spine for a cyclicals-led re-rating.
The sentiment cycle has not yet turned. Chandan notes that investors are still processing narrow news events rather than the broad macro improvement. That gap between fundamentals and feelings is where the opportunity sits, in his view. Once sentiment catches up, the Nifty can close the gap toward fair value.
Chandan’s team uses a proprietary monitoring framework that tracks the economic cycle, profit cycle, credit cycle, and sentiment cycle. Economy-wise, India remains the fastest-growing large country among its peers. Profit-wise, earnings visibility has lengthened. Credit-wise, bank lending has re-accelerated. Only the sentiment cycle is still defensive. That asymmetry forms the core of his constructive stance.
The transmission from macro recovery to equity performance runs most directly through cyclical sectors. Chandan’s fund is positioned accordingly.
Chandan lists the following as his highest-conviction exposures:
We were among the first to pick up on power as a mega trend driven by AI needs.
He adds healthcare – US generics, CDMO (Contract Development and Manufacturing Organisation) plays, and hospitals – as well as smaller sectors like telecom and textiles. Information technology remains an underweight.
A market that rewards materials, industrials, and financials in unison typically signals an early-to-mid-cycle expansion. The simultaneous move in cement volumes – which Chandan says are seeing double-digit growth from real estate and infrastructure – and in metals, driven by global electrification, is not a coincidence. It is a real-side demand signal being transmitted through multiple channels.
Chandan’s commodity thesis extends beyond the usual infrastructure narrative. He identifies two durable drivers.
Technological changes like electrification require physical commodities: copper and aluminium. Chandan sees this as a structural demand driver that lasts beyond any single capex cycle.
Countries are shifting supply-chain strategy from lean-inventory models to strategic stockpiling. The aim is to avoid the disruption that characterised recent years. Copper, aluminium, and rare earth materials are the direct beneficiaries. Chandan describes this as a move from "just-in-time" to "just-in-case" inventory management, lifting base metal demand on a multi-year horizon.
Domestically, cement volumes are running at double-digit growth on the back of housing and infrastructure spend. When economic cycles accelerate, commodities typically follow, Chandan argues. The cement read-through is one of the cleanest domestic macro signals in the equity market right now.
Chandan frames a weaker rupee not as a risk but as a competitive lever. India’s new trade agreements with Europe amplify the effect.
This view creates a natural link between currency weakness and the export-oriented pockets of healthcare (US generics), textiles, and auto ancillaries – all of which appear in his favoured sectors. For a trader, the transmission works through two channels: improved earnings translation for exporters and potential valuation support in foreign-exchange-sensitive names.
Chandan identifies two specific macro risks, and he assigns a different probability to each.
Forecasts point to El Niño effects in August and September, which could mean below-average monsoon rainfall. Chandan flags the third quarter as critical for food inflation monitoring. If food prices spike, the Reserve Bank of India’s room to stay accommodative shrinks, which would delay the sentiment cycle recovery he is counting on.
Oil prices influence India’s inflation trajectory, though Chandan notes that the full retail pass-through has not yet happened. Additionally, crude markets are in backwardation – future prices are lower than spot prices – which he reads as a signal that the market expects the current oil disruption to be resolved relatively quickly.
Key insight: Crude backwardation acts as a partial hedge against a sustained inflationary shock from energy.
He does not see major problems in the corporate sector itself. Household balance sheets have improved due to tax cuts, GST revisions, and the "gold effect" – the wealth impact of rising gold prices on Indian household net worth – which enhances borrowing and spending capacity.
Chandan counsels investors against trying to pick the exact bottom. Volatility is the price of the structural story.
He describes two common biases: recency bias, where market participants assume that because indices have corrected they will stay down; and myopic loss aversion, where the fear of a near-term decline prevents buying even when valuations are attractive. Both biases, he says, cause investors to miss the early innings of a cycle.
Chandan recalls a boat trip in Hong Kong. Motion sickness eased only when he fixed his eyes on a steady point in the distance. He applies the same principle to investing: if short-term volatility creates discomfort, focus on the horizon – the long-term trend – rather than on the daily wave.
Bottom line for traders: The Nifty 27,000 target is not a short-term price call. It is the destination that a multi-cycle recovery is supposed to deliver, provided food inflation and monsoon do not break the path.
The framework depends on inflation staying manageable. The next real-world checkpoints are the monsoon’s performance in August and September and the Q3 food CPI prints. If rainfall normalises and food inflation stays contained, the sentiment gap can narrow, and the cyclical rotation Chandan has positioned for can continue. If the monsoon disappoints, the sentiment recovery he expects will be postponed. For now, the macro architecture – profits, credit, and a backwardated crude curve – supports the roadmap, even while the daily news cycle does not.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.