Mumbai, 14th October 2026: PL Capital, one of India’s most trusted financial services organisations, in its latest India Strategy Report titled “The Perfect Storm: Rising Macro and Geopolitical Risks,” believes that escalating geopolitical tensions, rising inflation, deficient monsoons and higher interest rates are likely to keep Indian equity markets under pressure in the near term. While domestic economic growth and corporate demand have remained resilient, the brokerage cautions that mounting macroeconomic headwinds could weigh on consumption, earnings and foreign investor flows. PL Capital has revised its 12-month NIFTY target to 27,589 from 27,133 earlier, while expecting markets to remain volatile and potentially move lower before entering a consolidation phase.

Commenting on the report, Mr. Amnish Aggarwal, Co-Head – Institutional Equities, PL Capital, said, “Indian equity markets are facing a challenging combination of rising inflation, geopolitical uncertainty and tightening financial conditions. While domestic economic activity and corporate demand remain resilient, the impact of deficient monsoons, a potentially strong El Niño and elevated commodity prices could weigh on consumption and earnings in the coming quarters.According to report, the NIFTY is down by 8.2% during the last six weeks and 6% year-to-date, thereby making India one of the weakest performing economies among the major economies of the world. This is primarily due to continuous selling by foreign institutional investors (FIIs) on account of fears relating to the effect of inadequate monsoon rains, rising cost of crude and agricultural commodities, high bond yields, and the growing Iran-US conflict, which has now spilled into the broader Middle East region. PL Capital believes that such a scenario may increase uncertainty in the stock market.Regarding earnings, PL Capital expects sales growth of 16.2% and EBITDA growth of 14.7% on YoY basis in 2QFY27 without Oil & Gas. In terms of coverage universe, the brokeragefirm is forecasting sales growth of 24.1%, EBITDA growth of 10.4% and Profit before Tax growth of 8.6%. On the contrary, the pressure from cost side of the business is rising with 16 out of 27 industry segments showing lower EBITDA margins. As highlighted by PL Research, firms are gradually starting to face the brunt of higher-cost inventories which were purchased during the period when crude oil and other input costs were high.The report cites the poor monsoon and the possibility of a very strong El Nino as the risks to inflation and consumption. The monsoon season of India finished with a 13% deficit in rainfall, which is seen in 17 out of 36 meteorological subdivisions, accounting for 42% of the country’s total geographical spread. The water reservoirs also stood at 21% lower than the levels last year, putting soil moisture and the coming Rabi crop season in danger. PL Capital suggests that the effects might not be restricted to the domestic agriculture alone, as the El Nino-induced climate disruptions around the globe might affect the production of agriculture produce like soybeans, coffee, cocoa, and palm oil. Given that food accounts for around 40% of the inflation basket of India, high prices of agricultural commodities can maintain the level of inflation.