Nifty 50 up by 8.45% in 2024; Does it have potential to cross 27000 in the next 12 months? 

The Nifty closed near levels of 23,560 on Tuesday and is up 8.45% so far in 2024. In the last month, the Nifty 50 index has gained 4.66%. On June 19th, 2024, the Nifty 50 hit a new lifetime high of 23,630.85, and the Sensex touched a new high of 77,581.46. 

On Wednesday’s early trade, the Nifty 50 index gained marginally 0.13% to 23,588.65. Domestic brokerage firm Prabhudas Lilladher values Nifty at a 15-year average PE of 19.2x, with a March 2026 EPS of 1344, resulting in a 12-month target of 25,816 (previously 25,810 based on a PE of 19x with a March 2026 EPS of 1358). 

In the bull case scenario, the analyst values Nifty at a 5% premium to the 15-year average PE, or 20.2x (previously 20x), resulting in a bull case target of 27,102 (previously 27,100) for the next 12 months. In the bear case scenario, Nifty is projected to trade at a 10% discount to the long-term average PE, leading to a target of 23,235 (previously 23,229). 

The brokerage anticipates that the NDA government will continue to prioritize capital expenditure-driven growth, particularly in sectors such as PLI, Roads, Ports, Aviation, Defence, Railways, and Green energy, supported by a 20 basis points reduction in fiscal deficit in FY24, favorable monsoon conditions, and a dividend of Rs2.1 trillion from the RBI. 

Additionally, the analysts expect the NDA government to intensify its attention on supporting farmers, rural and urban poor, and the middle class to counteract the repercussions of recent electoral outcomes in certain states, characterized by a shift towards new social engineering and the provision of freebies. 

The brokerage has maintained a positive outlook on the automobile, banking, asset management companies (AMCs), capital goods, defense, hospitals, pharmaceuticals, cement, aviation, and discretionary consumption sectors, while also increasing its emphasis on capital goods, telecommunications, and cement. 

In their model portfolio, the broker has reduced weights on HUL, Titan, Infosys, and Bajaj Finance, while increasing weights on HDFC Bank, L&T, Interglobe Aviation, Sun Pharma, LTI Mindtree, RIL, and Bharti. 

The company has identified top picks in Large Cap stocks such as HDFC Bank, ICICI Bank, ITC, Larsen & Toubro, Max Healthcare Institute, Maruti Suzuki, Reliance Industries, and Siemens.

Prabhudas Lilladher has upgraded the major ratings for the following stocks. 

The broker has increased the weights of HDFC Bank, L&T, Interglobe Aviation, Sun Pharma, LTI Mindtree, RIL, and Bharti Ambuja Cement in their model portfolio.

Prabhudas Lilladher has upgraded the major estimates for the following stocks.

The broker has downgraded the estimates for significant stocks such as Century Ply, Greenpanel, Guj Fluro, SAIL, VIP, and IRCTC.

Additionally, they have included Century Ply, Green Panel, Kajaria, Navin, Bajaj Electricals, Jubilant Foodworks Ltd, Titan, KIMS, Max Health, PVR, and Chalet in their list of downgraded estimates, along with Gujarat State Petronet Ltd. 

Written by Omkar Chitnis

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