NEW DELHI: Financial year FY23-24 was a remarkable year for India’s equity market with the benchmarks- the Sensex and the Nifty 50 - surging 29% and 25% respectively. The broader market indices outshone the benchmarks with the BSE Midcap index advancing 63% while the BSE Smallcap index gaining 60%.
Most market experts believe that it will be very difficult for the local equities to repeat the bull run of FY24 as the start of calendar year 2024 hasn’t been very energetic with the benchmarks - Nifty50 and Sensex- trading with a little gain of about 2% each. They have attributed this performance to various volatility global as well as local equities have been facing which may prevail in the coming months as well.
Shrikant Chouhan, the head of equity research at Kotak Securities said there are tailwinds, but there are equal headwinds too, which can keep the market balanced in FY25. “In terms of valuations, the market is currently trading at 18 times to FY26EE, we are looking at an EPS (earnings per share) of ₹1,220 (FY26), the market valuations are fairly valued at present.
If events start to unfold positively and global macros start to ease then we can see the market reaching the 24,400 mark, which is 20 times of FY26E earnings,” said Chouhan. He added, “If we consider the other side of the coin with negative outcomes, the market may go down to 19,500, which is 16 times from FY26E.
We believe the market should do well in the long term, however, it is expensive in the medium to short term. In this type of scenario, it is advisable to buy on dips with a cautiously optimistic approach. The Sensex closed the last trading session of FY24 at 73,651.35 while the Nifty50 settled at 22,326.90. The year belonged to realty, auto and PSU stocks with many stocks in these packs gaining more than 100% in FY24.