Gautam Duggad, Head of Research, Institutional Equities, MOSL said 13,000-13,500 Nifty levels look achievable in next 18 months.
The house has an EPS estimate for Nifty at Rs 487 for FY18, Rs 602 for FY19 and Rs 693 for FY20.
The economy is looking good currently on back of good PMI manufacturing as well as services, decent IIP and good commercial vehicle sales, so one could see a gradual pickup in second quarter FY18 as far as macros are concerned, said Duggad. So, although worst seems to be over as far as macros are concerned, one should realize that the festive season has come early this time and so should not pronounce too early that this is the bottom, he said.
On the earnings front, he does not see any meaningful uptick in spaces like pharma, IT or private capex side of the market. He said the earnings are still coming from select sectors like private banks, autos, as well as oil and gas and metals, which are firing with all guns blazing.
At the moment, it looks like protracted earnings recovery for pharma and IT and rest of private capex side of the market, he added.
When asked about the outlook for power companies, he said for the companies that their house tracks, they are seeing a 4 percent YoY growth for NTPC profit, around 11 percent for PowerGrid and close to 60 percent for Tata Power, which has multiple moving parts. The hike in merchant power tariffs were seen only in the month of September, which is only one month of Q2, so some bit of uptick will rub off for this Q2 but if one were to look at aggregate earnings for the companies, then barring Tata Power, they do not see much uptick for them, said Duggad.
Sharing his rationale for having a price target of Rs 2000 on IndusInd Bank, Duggad said the synergy benefits from the deal with Bharat Financial Inclusion will continue to accrue for the bank. The deal is a win-win for both.
According to him, there could buoyancy coming back in the consumer sector.
For the full discussion, watch video
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