Benchmark equity indices could see gradual gains in FY27, with the Nifty 50 expected to trade in the 28,000–30,000 range by the end of the financial year, driven primarily by earnings growth, improving domestic demand and selective sectoral opportunities despite global uncertainties and geopolitical risks.Market experts said FY27 is likely to be an earnings-led year rather than a valuation-led rally, with investors expected to focus more on sustainable profitability, execution and stock-specific opportunities instead of aggressive multiple expansion.FY27 outlook remains positiveAshwini Shami, president and chief portfolio manager at OmniScience Capital, said the projected Nifty 50 range implies a potential upside of 15–25 per cent from current levels, supported by sectors such as banking, capital goods, telecom and domestic manufacturing themes.Experts expect Nifty 50 earnings per share to be in the ₹1,280–₹1,320 range in FY27, with the index likely to trade at 22x–24x valuations, reflecting confidence in India’s domestic growth momentum and corporate profitability.Anuj Jain, CIO and co-founder of Green Portfolio Pvt Ltd, said sectors linked to domestic capex and manufacturing, including capital goods, industrials, defence and BFSI, continue to offer favourable earnings visibility and policy support. He added that pharma and select FMCG stocks may provide portfolio stability during volatile market phases.West Asia conflict raises crude oil concernsMarket experts warned that the ongoing West Asia conflict remains a key risk for FY27 due to its potential impact on crude oil prices, inflation and economic growth.India imports nearly 85 per cent of its crude oil requirements, making the economy vulnerable to global energy market disruptions. According to estimates shared during the webinar, India’s net oil import bill could rise to around $132 billion in FY27 from nearly $123 billion in FY26, potentially widening the current account deficit to around 1 per cent of GDP.Experts cautioned that every 10 per cent increase in crude oil prices could raise wholesale price inflation by 80–100 basis points and consumer price inflation by 40–60 basis points, which may weigh on consumption and overall economic activity if sustained.FY26 marked by selective recoveryThe FY27 outlook follows a volatile FY26, during which geopolitical tensions, fluctuating foreign flows, elevated crude oil prices and valuation concerns overshadowed otherwise strong domestic fundamentals.According to market experts, FY26 was not a broad-based upcycle but rather a selective recovery where companies with earnings visibility, pricing power and strong balance sheets significantly outperformed peers.Large-cap stocks remained relatively resilient during the year, while broader markets witnessed sharp divergence, making disciplined stock selection increasingly important.Consumer discretionary, metals outperformConsumer discretionary stocks emerged as top performers in FY26 with a 72 per cent gain, driven by premiumisation trends, GST cuts and resilient auto demand. Materials gained 50 per cent on strong infrastructure demand, while real estate rose 22 per cent amid sustained housing demand.Banking, telecom, metals and capital goods also posted strong earnings growth supported by rate cuts, infrastructure spending and tariff hikes.However, chemicals, FMCG and pharma underperformed due to weak demand, global oversupply, elevated R&D costs and margin pressures.Experts also noted that mid- and small-cap stocks could continue to outperform large-caps in the foreseeable future, with stock-specific opportunities emerging where valuations and earnings performance remain mismatched.Published on May 21, 2026