Prabhudas Lilladher Sees Nifty Reaching 27,609 in 12 Months, Picks Adani Ports, ICICI Bank, Titan as Top Stocks

Prabhudas Lilladher Capital is forecasting the Nifty 50 to reach 27,609 over the next 12 months, driven by India's consumption revival and domestic demand. The brokerage has named Titan, Britannia, and DOMS Industries as top stock picks, and backs structural plays such as Adani Ports & SEZ and ICICI Bank. It also trimmed earnings estimates by 1.4% for FY26 and 0.4% for FY27, citing pressures from U.S. tariffs and fragile geopolitics.

The Nifty 50 index, India's most closely watched equity benchmark, is set to undergo a transformative rebalancing at the end of September 2023, with the inclusion of InterGlobe Aviation Ltd. (operator of IndiGo) and Max Healthcare Institute Ltd. This rebalancing reflects the growing strategic importance of the aviation and healthcare sectors in India's economic narrative [1].

Passive Inflows and Valuation Re-Rating

The addition of IndiGo and Max Healthcare is expected to trigger significant passive inflows into these stocks, driven by ETFs and index-tracking funds that must realign their portfolios to mirror the updated Nifty 50. According to Nuvama Institutional Equities, InterGlobe Aviation could attract $507 million in buying pressure, while Max Healthcare may see $423 million in inflows. These figures underscore the scale of capital reallocation and the potential for a valuation re-rating [1].

IndiGo and Max Healthcare: Growth Drivers

IndiGo's inclusion is particularly noteworthy. As India's largest airline by market share, it has already delivered a 35% total return over the past year, outperforming many traditional index constituents. The airline's cost discipline, fleet modernization, and dominance in the low-cost segment position it to benefit from India's long-term air travel growth, which is projected to expand at a 12% CAGR through 2030 [1].

Max Healthcare's entry into the Nifty 50 is equally compelling. The healthcare sector, valued at $370 billion in 2022, is forecast to grow to $610 billion by 2026, driven by an aging population, rising chronic disease prevalence, and government-led healthcare expansion. Max Healthcare, India's largest private hospital chain, is well-positioned to capitalize on this trend, with a robust balance sheet and a network of 12 hospitals across key cities [1].

Sectoral Momentum and Long-Term Strategic Value

The rebalancing reflects a broader realignment of India's equity markets. Historically, the Nifty 50 has been skewed toward banking and financials, but the inclusion of IndiGo and Max Healthcare signals a diversification into sectors with structural growth tailwinds [1].

Market Sentiment and ETF Dynamics

The rebalancing is likely to amplify market sentiment for these sectors. ETFs, which manage trillions in assets globally, will mechanically increase allocations to IndiGo and Max Healthcare, creating a self-reinforcing cycle of demand. This dynamic is particularly relevant for international investors seeking exposure to India's growth story without direct stock picking [1].

Sebi's Proposed Index Rebalancing Norms

Sebi's proposed relaxation of index realignment norms could significantly ease potential $1 billion sell-off risks for HDFC and ICICI Bank, which are heavily weighted in the Nifty Bank index. The "glide path" approach allows for a more gradual and controlled adjustment, which can help stabilize the market and prevent sudden price fluctuations [2].

Prabhudas Lilladher Capital's Forecast

Prabhudas Lilladher Capital is forecasting the Nifty 50 to reach 27,609 over the next 12 months, driven by India's consumption revival and domestic demand. The brokerage has named Titan, Britannia, and DOMS Industries as top stock picks, and backs structural plays such as Adani Ports & SEZ and ICICI Bank. It also trimmed earnings estimates by 1.4% for FY26 and 0.4% for FY27, citing pressures from U.S. tariffs and fragile geopolitics [3].

Conclusion

The inclusion of IndiGo and Max Healthcare in the Nifty 50 is more than a technicality—it is a strategic signal of India's economic evolution. As passive inflows and sectoral momentum converge, these additions are poised to drive a valuation re-rating, offering investors a compelling gateway to two of India's most dynamic industries. For those with a long-term horizon, the rebalancing represents a rare alignment of market mechanics and macroeconomic tailwinds.

References:
[1] https://www.ainvest.com/news/nifty-50-rebalancing-strategic-implications-indigo-max-healthcare-inclusion-2508/
[2] https://www.ainvest.com/news/sebi-index-realignment-norms-ease-1-billion-sell-risk-hdfc-icici-banks-2508/
[3] Prabhudas Lilladher Capital's Report on Nifty 50 Forecast