Raise FY18 Nifty target to 10,000, FII flows should remain conducive: CLSA

Mahesh Nandurkar of CLSA says the research firm has raised its March 2018 Nifty target to 10,000 against 9,700 earlier and raised target multiple by 0.5x to 17.5x.

Lower net equity supply will keep valuations elevated, he feels.

He says flows from domestic equity investors are diversifying beyond equity mutual funds. Inflows are now coming in through government-supported pension plans i.e the NPS and EPF and such equity flows have risen from less than USD 0.5 billion in FY15 to USD 2.2 billion in FY17.

Moderate equity supply and record buybacks are also important support for equity valuations, he adds.

Nandurkar believes FII flows should remain conducive as India's relative performance has also improved.