Nifty will hit 50,000 but wait till 2030: ICICI Direct

NEW DELHI: Domestic brokerage ICICI Direct, which sees headline equity index Nifty hitting the 21,400 mark in 2023, says the flagship index can touch 50,000 by the calendar year 2030.

"Indian equities are likely to display the same rhythm that the US and Nikkei did in 1990-2000 and 1980-1990, respectively, i.e. delivering a decadal move of 5x on headline indices. Our prognosis of various technical studies leads us to the conclusion that the Nifty is poised to reach towards 50,000 by CY30," ICICI Direct said in a report.

Stating that the performance in 2021 and 2022 further adds strength to the argument that Nifty is mimicking the forecast trajectory, it said decadal studies show that 2023 will turn out to be a strong year.

"Since inception in 1979, Sensex gained average 4x in each decade. From CY20 close of 13,981 (Nifty), similar projection leads to ~56,000," ICICI Direct analysts including Dharmesh Shah said.

In each of the three earlier instances, ratio breakout was followed by the index gaining at least 3x post breakout (current breakout in May 2022 at 16585, projects 50,000 for the Nifty in the current decade), the report said adding globally, across the US, Europe and Asian markets, similar ratio breakouts over past four decades, were followed by minimum 3x returns over the years.


Such returns, however, do not come in a linear fashion and corrections of around 20% along the way have always been a buying opportunity.

2023 Target
The brokerage's Nifty target for 2023 is placed at 21,400 while strong support is placed at 16,200 levels, it said.

Over the past four decades, third-year returns of each decade have been positive with a median of 18%.

"CY22 projection based on this cycle of 18,900 has been achieved, adding credence to the cycle study. A similar target from a CMP of 18,420 projects a target of 21,720. Additionally, 70% of the times a pre-election year has generated positive return," it said.

Over the past two decades, on eight out of 10 occasions, 60% of Nifty500 constituents, rising above the 200-day moving average (DMA), has triggered average 25% returns in Nifty in the subsequent 12 months.

In the mid-cycle of a multi-year bull phase, analysts expect midcaps to outperform. Sectors like BFSI, auto, PSU, capital goods & infra, and telecom are its favourites while IT is seen as providing favourable risk-reward.

Top stock picks for 2023
ICICI Direct has handpicked nine stocks that can give an average return of 22% in 2023. The list includes L&T, Ambuja Cements, Bosch, Federal Bank, Sundaram Finance, Bajaj Electricals, KEC International, Mishra Dhatu Nigam and Techno Electric.

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