Kotak Securities sets Nifty target at 19,190 and Sensex at 63,800 for 2022


Kotak Securities expects the net earnings of the Nifty-50 index to increase 34.5% in FY22, 16% in FY23 and 13.3% in FYI. ‘EX24. In his market outlook for 2022, he set the Nifty / Sensex best-case target at 21 109/69 600 (22x FY24); The base case scenario is 19,190/63,800 (20x FY24) and the worst case scenario is 17271/59,500 (18x FY24).

Bullish indicators

Jaideep Hansraj, Managing Director and CEO of Kotak Securities, said reading high frequency indicators including GST collection, electronic invoicing, IIP, freight and consumption across all sectors in the over the past few months is also encouraging, which bodes well for the markets.

Currently, Nifty 50 is trading at a valuation of 24.8x FY22, 21.4 FY23 and 18.6 FY24 earnings. “While valuations look rich in isolation, strong earnings growth in many stocks and sectors offers investment opportunities. In addition, the recent market correction offers opportunities to invest in quality large and mid-cap stocks, ”he said.

Kotak Securities expects Nifty EPS of 722 in FY22, 840 in FY23 and 959.5 in FY24.

“The GDP will be impressive”

Kotak Securities expects India’s GDP growth to be impressive even in FY23 at 8.1%, followed by a more normal impression of 6.5% in FY24 after 9.5% during FY22.

GDP growth would be mainly driven by investments as the external sector may not be favorable for a long time and the outlook for consumption may not be bright given the sustained and uneven impact of Covid on household income , according to Hansraj.

Main risks

Hansraj pointed out that there are two major risks that will continue to weigh on global and national economic growth in FY 23: firstly, waves of Covid as seen in various economies and further mutations of the virus and secondly supply chain issues that would continue for an additional 6-9 months weighing on global trade and growth.

“Pending impressive GDP growth, we expect the RBI to tighten its policy framework as follows: normalization of the political corridor (from February 2022); sterilize incremental sustainable excess liquidity; change the stance of monetary policy to neutral; and a 50bp increase in repo rates (from the end of the first half of fiscal 23). We expect a 10-year yield of around 6.5% by the end of FY23, ”he said.


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