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

    Synopsis

    "We remain positive on India's growth story given strong tailwinds and expect steady returns with a stock-specific approach," Prabhudas analysts Amnish Aggarwal and Anushka Chhajed said, adding that the June quarter saw sales beat of 0.6 per cent, while EBITDA and PBT were lower than estimates by 6.5 per cent and 9.7 per cent, respectively.

    Stock IdeasiStock
    Notwithstanding the upheaval on Dalal Street amid a rise in the US dollar index, domestic brokerage Prabhudas Lilladher has increased its Nifty target to 20,057, signalling an upside potential of 14.5 per cent for June 2023.

    "Nifty EPS has seen only minor tweaks in the current quarter with 13.2% EPS CAGR over FY22-24 with FY23/24 EPS of Rs 857.9 and Rs 978.4. Our estimates are lower than consensus by 3.9/5.0% for FY23/24. Nifty is currently trading at 19.9x 1-year forward EPS, a 5% discount to the 10-year average of 20.5x," the brokerage said in a report.

    Past three major corrections show that Nifty bottomed out around the 10-year average PE except in March 2020, when it bottomed out at a 23% discount to the 10-year average.

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

    "We remain positive on India's growth story given strong tailwinds and expect steady returns with a stock-specific approach," Prabhudas analysts Amnish Aggarwal and Anushka Chhajed said, adding that the June quarter saw sales beat of 0.6 per cent, while EBITDA and PBT were lower than estimates by 6.5 per cent and 9.7 per cent, respectively.

    Sectorally speaking, it remains overweight on auto, banks, IT services, capital goods and healthcare and underweight on metals, cement, consumer, oil and gas and NBFCs.

    High conviction picks include RIL, ICICI Bank, Avenue Supermarts, Sun Pharma, Apollo Hospitals, Ashok Leyland, Crompton Greaves, Endurance Technologies, Westlife, VIP Industries, Inox Leisure, Nazara Tech, M&M, L&T and Navneet Education.

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



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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