Prashant Jain Sees Nifty Rallying 50% In Three Years

Veteran investor Prashant Jain, Co-Founder of 3P Investment Managers, projects that the Nifty could yield 45-50% returns over the next three years. This optimistic forecast is based on an expected CAGR of 14-15%, supported by steady earnings growth and modest valuation re-ratings. Jain notes that macroeconomic headwinds such as high oil prices and foreign portfolio investment selling are receding, paving the way for a more stable economic environment. He anticipates India’s balance of payments will shift to a $50 billion surplus in FY27, signaling improved financial stability for the domestic market.

The market’s mid-cap and small-cap segments have outpaced the Nifty 50 significantly throughout 2026. Data shows the Nifty Smallcap 250 rose 10% in the current year, whereas the Nifty 50 declined by 6%. This divergence is driven by robust earnings trajectories, with mid-cap and small-cap companies reporting year-on-year earnings growth of 29% and 30% respectively in Q4 FY26. Analysts project this momentum will continue, with earnings estimates for these indices remaining aggressive compared to large-cap stocks. Investors are actively reallocating capital, moving ownership into stable, long-term hands.

The banking sector remains a primary focus, particularly large private banks that have shown relative resilience amidst broader market volatility. Despite a 9% year-to-date decline in the benchmark Nifty 50, private banks have seen strong institutional buying, especially following robust Q1 provisional business updates. Major lenders including HDFC Bank, ICICI Bank, and Bandhan Bank are favored by experts for their strong fundamentals. As domestic inflows continue to absorb foreign selling, the market is poised to capitalize on easing global commodity prices and a strengthening rupee, supporting a potential long-term upward trend for financial indices.