BofA Securities has significantly revised its earnings growth forecast for India's Nifty 50 companies, now projecting an increase of 8.5% for fiscal year 2027, down from 14%. This adjustment comes in light of rising stagflation risks, particularly as Brent crude oil prices hover around $110 per barrel, which could impact India's import bill as the world's third-largest crude importer. Consequently, BofA has also reduced its GDP growth estimate for India to 6.5% from 7.4%. In a pessimistic scenario involving a prolonged conflict in the Middle East, GDP growth could plummet to 3%, with earnings growth potentially falling to zero. Currently, the Nifty 50 index trades near its long-term average valuations, with BofA suggesting that a resolution to the Iran conflict could lead to a 15% upside. However, the index is expected to underperform compared to its emerging market peers due to relatively high valuations. BofA has set a target of 26,200 for the Nifty by December, while downgrading sectors sensitive to interest rates, such as mid-sized private banks and real estate, to an 'underweight' rating.