PL Capital has raised its one-year target for the Nifty 50 index to 27,019, up from a previous estimate of 26,449.
The brokerage points to an improving macroeconomic backdrop, moderating crude oil prices, and what it describes as attractive market valuations as key drivers for the upward revision.
The BSE Sensex also posted strong gains, surging over 800 points in a single session.
The firm values the index at a 10% discount to its average 15-year price-to-earnings multiple, based on FY28 earnings estimates.
The upgrade comes as Indian equity markets have shown resilience in recent sessions.
Broad-based buying lifted major benchmarks earlier in the week, with the Nifty 50 climbing past the 24,200 level.
The BSE Sensex also posted strong gains, surging over 800 points in a single session.