Big Bull Rakesh Jhunjhunwala sees the Nifty touching 1,25,000 by 2030, considering the fact that company or corporate earnings are expected to grow by 16 per cent annually. The target is almost 13 times the index's close of 8,564.40 on Thursday.
Jhunjhunwala told a news channel that the Nifty has grown 10 times in the last 15 years and can jump 10-12 times in the next decade.
So, based on the assumption of strong economic growth, bounce back in corporate earnings to double digits and revival in investment cycle, the Nifty and the Sensex can reach these levels which look more like a tall task.
When asked about the targets are they working with for the next 15 years, most of analysts agreed that the bull run is here to say, but said there are caveats and assumptions which needs to get fulfilled first before we can achieve these targets.
If we look deeper into the data, the Nifty has moved from the levels of 943 recorded on 29th April 2003, to 8600 levels as of today (4th December 2014), at an yearly compounded growth rate of above 20 per cent.
"So, if we apply the same growth rate, 125000 is possible by 2030 on the Nifty & 4,00,000 on the Sensex with support from strong economy growth, stable government at the Center, as well as infrastructure & technology development," says Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.
"Equities are expected to perform well over the next decade in India along with corporate earnings expected to grow above 15 per cent and EPS of Indian bourses set to move higher, pushing the valuations to these levels," he adds.
By 2018, Kavikondala estimates the Nifty to cross 15000; by 2020, 35000; by 2025, 60,000 and by 2030, he expects the Nifty to cross 1 lakh, keeping in view the strong economy growth.
Most global brokerage firms have expressed their confidence in the India's story with Narender Modi at the helm of things. This is reflected in their overweight stance on the India markets, which have outperformed global markets in the year. The Indian markets are still trading below previous valuation peaks of 25x, which also supports the optimism.
The Indian stock market created history last week on Friday, when the total investor wealth hit a record high of Rs 100 trillion in trade on the BSE, which also puts it in the ten largest exchanges of the world in terms of total market capitalisation of listed firms.
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