Indian equity analysts raise Nifty 500 buy ratings to 70 percent on valuation reset
A moderation in valuations and resilient domestic demand have prompted analysts to increase their buy recommendations for India's Nifty 500 index to nearly 70 percent, signaling a broad shift in sentiment toward insurers, hotels, and real estate.
Analysts have significantly increased their bullish bets on India’s Nifty 500 companies, with buy recommendations reaching nearly 70 percent of all coverage as of late July. Bloomberg data shows that 5,938 out of 8,533 analyst ratings were buy calls, up from 66.1 percent at the end of 2025, while hold and sell recommendations declined.
This shift in sentiment highlights a broader reset in market expectations following an 18-month period where Indian equities lagged behind other emerging markets and the United States. Yudhajit Baul, founder of Yudhajit Financial Services, noted that the "trailing price-to-earnings ratio of around 20.65 times is below its 10-year average of 23.4 times," creating a more attractive entry point.
Life insurance and hospitality have emerged as the primary beneficiaries of this renewed conviction. Buy ratings for life insurers surged to 93 percent from 82 percent, while hotel stocks saw their buy share climb to 90.8 percent as sell recommendations dropped sharply.
Real estate and healthcare facilities also captured increased analyst favor. Buy recommendations for real estate rose to 152, pushing the sector's buy share to 84.4 percent, while healthcare facilities secured 141 buy calls, representing 87 percent of total coverage.
Pratyush Pandey, founder of AARE Consulting, attributed this optimism to "improving earnings visibility, domestic demand and favourable structural trends" rather than short-term momentum. He pointed to sustained residential demand and rising commercial leasing as key drivers for real estate, though he cautioned that "valuations have become demanding in some pockets."
The bullishness extended to asset managers and auto-parts manufacturers, which saw their buy shares rise to 81.9 percent and 81.1 percent, respectively. At the individual company level, SBI Life Insurance, DLF, Leela Palaces Hotels & Resorts, and Ather Energy were among the stocks receiving unanimous buy ratings with zero hold or sell recommendations.
Despite the broad improvement, selectivity remains evident as analysts cooled on specific industrial and technology segments. Buy ratings for electrical-component companies fell to 59.9 percent as sell calls increased, while IT services saw their buy ratio slip to 55.2 percent.
Tyre manufacturers remained the least preferred group, with only 45.6 percent of recommendations carrying a buy rating. Meanwhile, banks registered a more moderate improvement, with their buy share increasing to 74.1 percent even as the number of covered institutions declined.
