- Sensex trims initial losses, still down 122 points on weak IIP dataBSE Sensex plunges 210 pts today, marks biggest weekly fall in five ahead of RBI, US Fed meetsIndian stock market lacks depth, over-dependent on FIIs: Assocham studyMarket Outlook: BSE Sensex may continue to fall ahead of RBI, US Fed meets
While foreign brokerages like Deutshce Bank and Nomura are expecting the Sensex to touch a new-high of 22,000 over the next one to three months, Bloomberg analyst estimates project a similar quantum of gains of 2,087 points over the next one year.
Consensus estimates on the 30 index constituents indicate that the index may add another 10% in next one year and hit 22,803 levels. This expectation appears modest compared with 13% to 17% rise predicted by some of the foreign brokerages in 2014. The Sensex closed at 20,715.58 on Friday.
Both Goldman and Macquarie have based their outlook on the broader 50-share Nifty, which they see at 6,900 and 7,200 points, respectively, by the end of 2013. The projected levels indicate an upside of 17% and 12%, in that order. Post the recent state election results, both the brokers are optimistic that a Narendra Modi-led BJP is likely to come to power after the Lok Sabha election in 2014.
BofAML pegged its 2014 Sensex target at 23,500 based on expectations of a valuation of 15 times one-year forward earnings.
According to Bloomberg consensus estimates, analysts appear most upbeat on Bharti, Cipla, NTPC and ONGC among the Sensex constituents, as they expect a more than 20% upside for these stocks over the next 12-months.
Bharti leads the bluechips in terms of expected returns, with analysts predicting a 26% upside to the stock over the period with a target price of R405.63.
Analysts are also optimistic on pharmaceutical companies which benefit from a weaker rupee along with being considered defensive stocks. Amongst the pharma stocks included in the Sensex, Cipla, Sun Pharma and Dr Reddy’s are expected to gain 21%, 17% and 15% in 2014 as per consensus outlook.
Although FMCG giant ITC is also among the preferred stocks with an 18% predicted gain, analysts appear cautious on Hindustan Unilever (HUL).
BHEL, Hindalco, Tata Steel and L&T are among the expected weak performers with a 15% to 2% decline expected.