Kotak Securities Says Nifty To Grow 14 Pc In 2023 Despite Rising Downside Risks, To Economic Growth

Indian equities will continue to witness strong investor interest next year as well, and are expected to gain nearly 14 per cent over Tuesday's close, a domestic brokerage said. The 50-share benchmark Nifty is estimated to be at 20,922 points by the end of 2023, which is nearly 14 per cent higher than the 18,385.30 points closing level on Tuesday, Kotak Securities said.

The Nifty had closed 2021 at over 17,400 points and 2022 has seen investor interest in Indian equities despite a slew of troubles on the macro front like the war in Ukraine, and inflation. "India's economic and earnings recovery coupled by capital expenditure cycle, (including PLI scheme) is expected to keep Indian markets attractive over the long term," the brokerage said. Over the medium term, Indian economy should be supported by favourable policy environment, impact of PLI schemes, opportunities arising from shift of global supply chain, the government's thrust on infrastructure spending, among others, it said.

It added that conditions for private sector capex remain conducive given the low corporate leverage, rising capacity utilisation, broad-based improvement in profitability and robust balance sheet of the banking sector. The brokerage expects net profit of companies in the index to grow by 10.8 per cent in FY23 and 16.4 per cent in FY24, led by strong show by sectors such as automobiles, banks, diversified financials and telecom.

In the bull case, Nifty-50 target has been placed at 20,919 points, while in the bear case, it has been forecast to go down to 16,515 points. The brokerage, however, said the downside risks to the Indian GDP growth are rising from global factors and the lagged impact of monetary tightening. Private sector capex is likely to be delayed given the uncertain global and domestic demand conditions, it said, expecting growth to slip to 6.8 per cent in FY23 and 6 per cent in FY24 with downside risks. It expects the RBI to hike rates by 0.25 per cent at the February review of the monetary policy. P

(PTI)