Forecast Analysis

03-May-2021

• Forecast for Nifty for next 3yrs (March 31, 2024)

  • Check on current Earning Cycle, Low towards recovery

  • Expected Nominal GDP ~8%, Read GDP (8 +6% Inflation)=~14%

  • Earnings growth has been low, to be high to achieve GDP projections

• Historic: Nifty grown from 943 in April 2003 to 8600 in Dec 2014 with 20% compounded growth

  • =RATE(12,0,-943,8600,)~20%

• Forecast

  • Low earning growth: 20% CAGR

  • High earning growth: 30% CAGR

• Current

  • PE: ~30 (Higher side)

  • Nifty Price: 14690

  • Nifty Earning: 442

• Forecast for Nifty - Low

  • PE Low: 20

  • Earning Low (20% CAGR growth) : =FV(20%,3,0,-442,) = 768

  • Nifty Low Price: 20*768 = 15275

• Forecast for Nifty - Median

  • PE Median : 25

  • Earning Median (25% CAGR growth) : =FV(25%,3,0,-442,) = 863

  • Nifty Median Price: 25*863 = 21582

• Forecast for Nifty - High

  • PE High: 30

  • Earning High (30% CAGR growth) : =FV(30%,3,0,-442,) = 971

  • Nifty High Price: 30*971 = 29132