Most market experts do not expect a significant upside in the benchmarks in the last two months of the calendar year though a majority is optimistic in terms of the year-end target range, as per the findings of the latest Moneycontrol Market Poll.
While the Nifty50 is trading around 24,200 levels currently, majority of the experts – 48 percent -- believe that the benchmark will end CY24 between 23,000 and 25,000. Around 39 percent of the respondents, however, expect a further upswing with the Nifty ending between 25,000 and 27,000.
The Moneycontrol Market Poll reached out to market participants across categories – broking firms, mutual funds, AIF/PMS players and independent analysts – and received nearly two dozen responses.
Interestingly, around 13 percent of the respondents said they expect the Nifty to end above 27,000, hinting at a gain of nearly 12 percent from the current levels. More importantly, none of the respondents chose the option of Nifty falling below 23,000 by end of CY24.
Meanwhile, Axis Securities remains confident in the long-term growth potential of the Indian equity market. However, given current valuations that allow for limited expansion, corporate earnings growth will be the key driver of future market returns and therefore, a bottom-up stock-picking approach emphasizing “growth at a reasonable price” and “quality” will be essential for achieving satisfactory returns over the next year, it says.
Analysts anticipate heightened volatility in Samvat 2081, driven by US election dynamics, China’s economic recovery, and sustained geopolitical tensions. With recent foreign outflows exceeding $10 billion, many expect FIIs to remain cautious due to stretched valuations and weaker earnings.
The global rate cut cycle is also in focus, with the US Fed reducing rates by 50 bps in September and signalling further cuts, while the RBI’s recent shift to a “neutral” stance hints at a potential rate cut within 6-9 months.
“We expect Nifty to end in the range 24,000 to 26,000 in CY24. Next couple of months will be quite interesting with multiple global issues being a concern but there are positives as well like the potential rate cut from RBI, impact of US election results and impending recovery from the short-term correction in the market,” said Sonam Srivastava - Founder and Fund Manager at Wright Research.
Analysts further project that Nifty50 companies will achieve an 11.8 percent earnings CAGR over the FY24-FY26 period, reaching Rs 1,081 and Rs 1,237 in FY25 and FY26, respectively. This follows a remarkable 26 percent earnings CAGR during FY20-FY24, but data indicates that the growth momentum is slowing.
The Nifty50 has delivered impressive returns of 28 percent CAGR during this period, reflecting strong earnings growth alongside expanding valuation multiples.
In the broader markets, NSE500 companies have reported a robust 20% earnings CAGR from FY20 to FY24. For FY25 and FY26, a sample of the top 200 companies by market capitalization is expected to see EPS growth of 10% and 18 percent YoY, indicating a two-year earnings CAGR of 14 percent. This trend also suggests a deceleration in earnings growth momentum for broader markets, which have delivered exceptional returns of 32 percent CAGR during FY20-FY24.
Meanwhile independent analyst and market veteran Ajay Bagga is more optimistic than consensus, viewing the Nifty’s projected range of 23,000 to 25,000 for CY2024 as conservative.
With H2 recovery and increased government capex feeding into economic growth, Bagga expects the Nifty to reach new highs by year-end, with FY26 EPS projected at Rs 1,240-1,260. While returns may not match Samvat 2080, a steady 12-15 percent annual growth from Indian markets over the next decade remains likely, he says.
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