Nifty to test 21,430 in 12 months, says Prabhudas Lilladher. Remains overweight on auto, bank, IT stocks

economictimes.indiatimes.com:

Nifty is expected to test 21,430 levels over the next 12 months — a 2,000-point or 11% upside from the current levels — according to Prabhudas Lilladher. The brokerage is 'overweight' on auto and bank stocks and has raised its weight on HDFC Bank, Infosys and Tata Motors. Nifty has given over 10% return in FY24 on a year-to-date basis, led by resilient domestic demand and $14 billion worth of net inflows by foreign institutional investors (FIIs).

Prabhudas values Nifty at 12% discount to its 10-year average PE (20.8X) to arrive at a 12-month target of 21,430 in the base case scenario. In the bull case, the 50-stock index could scale 24,353, the brokerage noted. India's 6.5%+ expected GDP growth rate for FY24 is likely to remain highest, globally, even as growth is slowing down in the US and Europe is embracing recession.

With FII inflows back and likely to sustain, benign food and fuel inflation, revival in industrial capex and strong infra push by the government, India is likely to reap rich dividends, the brokerage said in its 'India Strategy' report.Source: Prabhudas Lilladher Apart from auto and banks, the brokerage is also 'overweight' on IT services, capital goods and healthcare. It has increased its weight on Titan Company, Max Healthcare and L&T. However, it remains 'underweight' on metals, cement, consumer, oil & gas and diversified financials.