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Maintain Nifty Target for FY23
With everyone positive about India's history, we also maintained our positive stance over the long term, helped by a benign structure emerging with rising capital spending allowing banks to leverage credit growth and continuity in a strong earnings trajectory in the Nifty 50 -improve the universe. Nifty universe cumulative net profit for the last four quarters reached an all-time high (exceeded Rs 9.5 lakh crore in Q4FY22), We expect FY23 and FY24 Nifty Earnings Per Share (EPS) of Rs 826 and Rs 920, marginally down 2% or flat after Q4FY22 reporting season. Its estimates are conservative, 9% below consensus estimates. We have kept its March 2023 target of Nifty at 18400, valuing it at 20x FY24 earnings versus 22x earlier. It lowered the Nifty multiple to reflect the scenario of rising interest rates. In the short term, the market trend is likely to be range bound and the market will wait and watch until there is more clarity on the direction and intensity of the prevailing inflation, including the demand scenario, she believes. With this in mind, she believes that although Indian markets will fall along with global markets, the intensity of this decline is likely to be much less. Some people are still expecting another correction in the market in the short term. That could be the bottom and take valuations to more comfortable levels. Some of them are talking about the possibility of a correction of around 10% as a real US recession is yet to come. What is unfolding is just recession fears and actual earnings downgrades are yet to come.
Themes to Play
