A recent study estimates that the Nifty benchmark index will be able to yield an annual return of 8–10% in the next fiscal year (FY26), while the Sensex will yield returns of 8–12%.
GoalFi, a smallcase manager, in its report says that those companies with a high domestic focus are best placed to handle risks like US tariff increases and an increase in commodity prices.
In the banking space, large-cap private banks are expected to witness credit growth of 14–16% in FY26. Benchmark indices have already achieved nearly a 7% rise in FY25, reflecting favorable market momentum.
The report predicts that from where they are today, markets may grow 12–16% by March 2026, which is an annualized return of 8–10% over the 12 months from March 25, 2025. These estimates are put forth on the basis of a 12–15% growth rate in corporate earnings and a 19–21x forward price-to-earnings (PE) multiple for FY26 earnings. In contrast, Sensex may have an upside of 14–18%, which works out to an 8–12% annualized return.
Robin Arya, CEO and Founder of GoalFi, stated that the expected upside in Sensex and Nifty shows that the growth story is robust, led mainly by good corporate earnings. He also added that a mix of international and domestic conditions coupled with the resumption of Foreign Institutional Investor (FII) flows will be instrumental in fueling the growth in the markets.
Moreover, the report points out important tourism trends. Religious tourism, hitherto registering more than 300 million domestic pilgrims each year prior to the onset of COVID-19, is also estimated to expand by 10–12%. In a similar manner, medical tourism is likely to grow at an 18–20% compound annual growth rate (CAGR) and could have a market value of $13–15 billion by the year 2026.
Infrastructure expansion is also to boost economic growth, with grand proposals like the establishment of 100 new airports within 2030 and 8–10% yearly expansion of the road network.
On the demand side, rural demand is likely to increase by 5–7% YoY, whereas urban expenditure will go up by 6–8%. The capex cycle is likely to experience robust growth, with private capex expected to grow by 12–14% YoY and government infrastructure spending by ₹11–12 lakh crore.
In addition, growth in tourism industry-related revenues—such as hospitality, travel, and infrastructure—is projected to be strong at 15–20%.
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