Brokerage Kotak Securities has predicted a marginal upside for the benchmark Nifty index in 2024. The brokerage expects Nifty50 to touch 21,834 in the next one year, which reflects a 3.23% upside from the current level.
Nifty50 closed at 21,150.15, down 1.41 percent, on Wednesday.
The brokerage said that in 2023 so far, Nifty surpassed the 20,000 mark for the first time, and BSE Sensex exceeded the 67,900 mark, with both Indexes gaining around 13 percent.
“While presenting the market outlook, we have to consider the 1-year forward outlook of EPS (earnings per share), and based on that, our base case target is 21834, which is 18 times FY26 estimated EPS of Rs 1,213,” Kotak Securities said.
“The Nifty Midcap Index and Smallcap Index outperformed and gained significantly. Sectors that have done well in the calendar year 2023 include Real Estate, PSU Banks, CPSE, Auto, Pharma, S&P Industrials and FMCG,” the brokerage added in its report titled Market Outlook 2024.
During this period, midcap and smallcap indices witnessed strong growth of 39 percent and 48 percent, respectively.
The current calendar year has been remarkable for the domestic equity markets, with the Nifty crossing the 20,000 mark in September for the first time, and the BSE Sensex surpassing the 70,000 mark in December.
However, the brokerage anticipates a deceleration in the pace of the stock market next year while predicting 2024 to be the year of investments across asset classes.
“Equity and other asset classes, such as debt, real estate, or gold, may provide investment opportunities during the calendar year 2024, which would give a decent return in the coming 2 to 3 years. We can consider CY24 as the year of investment across various asset classes,”
Looking ahead to 2024, the brokerage firm foresees India entering a period marked by various significant events. The first half of the New Year will witness scrutiny of factors such as global interest rates, trends in Indian consumption, and general elections. Furthermore, Kotak Securities predicts that the Reserve Bank of India (RBI) will maintain its current monetary stance in the upcoming year, emphasising its commitment to curbing inflation below 4 percent.
The RBI anticipates inflation to be under control, forecasting it at 5.2 percent in the first quarter, 4 percent in the second quarter, and 4.7 percent in the third quarter. The central bank suggests the current upward inflationary trend may persist for the next 1-2 months.
On the economic growth front, the RBI has revised India’s growth rate estimate for 2023–24 from 6.5 percent to 7 percent. This positive outlook is echoed by the domestic rating agency ICRA, which has also revised its growth rate estimate for the same financial year from 6.2 percent to 6.5 percent.
Kotak Securities’ cautious forecast for the stock market in 2024 aligns with a broader context of economic projections and expectations for controlled inflation in the coming year.
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