Indian equities are likely to remain rangebound over the next three months, following their recent slide into correction territory after the worst earnings season in four years and nursing still-high valuations, Goldman Sachs said.

The Wall Street brokerage, which remains tactically "marketweight" on Indian equities, expects the benchmark Nifty 50 to hit 24,000 points in the next three months, implying a gain of a little under 3% from current levels.

Still, that is a reversal from last month when it had predicted the Nifty would fall about 1% to around 24,500 in three months.

Since that prediction, the Nifty and the BSE Sensex have slipped into the correction territory, having fallen more than 10% from their respective all-time highs on Sept. 27 due to record foreign outflows and underwhelming corporate earnings.

"We expect the market to remain rangebound over the next 3 months and for a back-loaded recovery as growth picks up," Goldman analysts said in a note published late on Tuesday.

They expect the Nifty to hit 27,000 in 12 months, implying a nearly 16% gain from current levels and surpassing its record high of 26,277.35.

However, Goldman said Indian equities run the risk of further de-rating as, despite the recent slide, valuations still remain above a 'fair-value' estimate of 21 times forward earnings (PE).

"Valuations have de-rated 8% after the recent pullback, but still trade at nearly 23x forward PE for MSCI India, which is 1.4 standard deviation above its 10-year mean."

The MSCI India index is also in correction, or down more than 10% from its record high.

Goldman expects Indian companies to post 13%-16% earnings growth over 2025, which is factored into their long-term Nifty target.

For the July-September quarter, around half of the 50 firms on the Nifty have beaten analysts' estimates, the lowest since 20% of companies topped estimates in the March 2020 quarter at the start of the COVID-19 pandemic, per data compiled by LSEG.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)