Nifty Today: Nifty to cross 20,000-mark by next June: Prabhudas Lilladher

Despite turmoil on Dalal Street amid a rise in the US dollar index, domestic brokerage Prabhudas Lilladher has raised its Nifty target to 20,057, indicating 14.5 per cent growth prospects for June 2023.

“Nifty EPS has seen only marginal change in the current quarter with EPS CAGR of 13.2% in FY22-24, with FY23/24 EPS at Rs 857.9 and Rs 978.4. Our estimate for FY 23/24 is 3.9/s. lower than the consensus of 5.0%. Nifty is currently trading at 19.9x 1-year forward EPS, which is a 5% discount to the 10-year average of 20.5x,” the brokerage said in a report.

The last three major corrections show that Nifty was below its near 10-year average PE except in March 2020, when it was below the 10-year average at a discount of 23%.

Evaluating the headline index at 10-year average PE (20.5x) with March 2024 EPS of Rs 978.4, the brokerage has reached the June 2023 target of 20,057 in a base case scenario. In a bull market scenario, the target is 22,063.

“We remain positive on India’s growth story given strong tailwinds and expect stable returns with a stock-specific outlook,” said Prabhudas analysts Amnish Agarwal and Anoushka Chhajed. Sales declined by 0.6 per cent in the June quarter, while EBITDA and PBT were lower by 6.5 per cent and 9.7 per cent, respectively.

In the sector, it continues to be overweight on auto, banks, IT services, capital goods and healthcare and underweight on metals, cement, consumer, oil & gas and NBFCs.

High conviction includes , , , , , , , , Westlife, , , Nazara Tech, M&M, L&T and .

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)


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