Sensex @ 1,00,000 Eminently Achievable On 5-12 months View: Jefferies’ Christopher Wooden

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How a lot can Dalal Road indices rise within the coming years? Christopher Wooden of Jefferies thinks {that a} goal of 1,00,000 is “now eminently achievable” for the Sensex on a five-year view.

In his Greed & Concern report  – Wooden’s weekly notes to traders –  the International Head of Fairness Technique at Jefferies mentioned the goal is foundation the idea of a development of 15 p.c earnings per share (EPS) progress and {that a} five-year common a number of of 19.4 is maintained.

Chris Wooden, as he’s broadly identified, expects the Sensex to hit the 1,00,000 mark in FY27 or “someday in late 2026”. This will likely appear an aggressive assumption, mentioned Wooden, however India has all the time been a inventory marketplace for progress traders with the a number of to go along with it.

The remarks from the veteran fund supervisor come at a time when benchmark indices Sensex and Nifty50 have receded about six p.c from all-time highs, touched in October 2021. In January 2022, each got here inside 1.5 p.c of the peaks however reversed course as soon as once more.

Sensex 5-year goal degree assuming 19.4X PE

12 months (end-March) EPS YoY (%) Sensex @ 17x PE
FY21 2,196 (10-year common) (5-year common)
FY22 2,308 5.1
FY23 2,752 19.3
FY24 3,227 17.3 54,849 62,456
FY25 3,711 15 63,077 71,824
FY26 4,268 15 72,538 82,598
FY27 4,908 15 83,419 94,988
FY28 5,645 15 95,932 1,09,236
FY29 6,491 15 1,10,321 1,25,621
Supply: Bloomberg, Jefferies

Wooden mentioned the sturdy progress outlook explains the persevering with resilience of the inventory market regardless of perceived excessive valuations. The Nifty now trades at 20.5 occasions one-year ahead earnings, he mentioned.

True, the inventory market has corrected by 5.1 p.c since peaking in October, however the market would have suffered far more have been it not for persevering with wholesome inflows into home mutual funds, the veteran fund supervisor added.

Listed here are another highlights from the Greed & Concern observe:

  • India set to document maybe finest earnings progress in Asia this yr (behind solely Indonesia, and the Philippines)
  • Two exterior dangers to Indian equities: Fed tightening, a spike in oil charges
  • Consensus earnings progress forecast for MSCI India at 20.3%
  • Consensus earnings progress forecast for Asia ex-Japan area at 11.3%
  • “In a G7 world the place worth traders might lastly take pleasure in an prolonged interval of outperformance overgrowth till no less than the Fed performs one other U-turn, India ought to be a first-rate object of focus for growth-oriented fairness traders, be they Asian and rising market traders or international traders,” he mentioned.

    He mentioned the home demand focus will definitely be maintained in Jefferies’ long-only Indian portfolio, which stays broadly unchanged since its inception in July 2021.

    Jefferies’ India long-only fairness portfolio incorporates 16 shares, with Reliance Industries and ONGC having the utmost weightage.

    Sector Inventory Weightage (%)
    Financials ICICI Financial institution 7
    HDFC 7
    SBI 4
    Bajaj Finance 7
    ICICI Prudential Life 7
    ICICI Lombard Basic 8
    Vitality Reliance Industries 10
    ONGC 10
    Actual property Godrej Properties 8
    Century Textiles 5
    DLF 4
    Auto Maruti Suzuki 5
    Infra L&T 5
    Client Jubilant FoodWorks 5
    Materials Tata Metal 4
    Logistics Concor 4
    Supply: Jefferies

     

     

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