Sensex at 83,250, Nifty 25,000 by Dec 2024! What ICICIdirect says on stock market outlook

ICICIdirect in its latest strategy note suggested a Sensex target of 83,250 and Nifty target of 25,000 for December 2024, as it introduced FY26 earnings estimates into its projections. Corporate earnings recovery has been healthy in the recent past with Nifty earnings growing at 22 per cent compounded annual growth rate (CAGR) over FY20-23. As the domestic brokerage introduced FY26 earnings estimates, it now expects Nifty earnings to grow at a CAGR of 16.3 per cent over FY23-26.

ICICIdirect said Indian stock Indices made fresh life highs and India retained its the best performing market helped by resumption of foreign flows. 

The net flows for the current calendar year is nearly of $17 billion while rest of the emerging markets have seen nominal flows. In the post Covid era, while most of the markets are still reeling below their 2021 highs, Indian indices have given significantly higher returns than the rest, ICICIdirect said. 

"As we embark on 2024, there are greens hoots in the form of continued corporate earnings momentum domestically, healthy GDP growth, benign commodity prices outlook as well as likely rate cut globally. Thus, there seem to be more positive than negatives ahead. Amidst this setup, India is in a sweet spot vis-à-vis global peers with macroeconomic stability and corporate earnings in sight," ICICIdirect said.  

ICICIdirect said apart from JP Morgan GBI-EM-GD index, Bloomberg Global Aggregate Index(Global Agg) is also likely to include Indian bonds in its index. It has an estimated AUM of $2.5 trillion and with 0.6-0.8 per cent weight, additional potential inflows could $15-20 billion. 

Such inflows coinciding with global rate-cut cycle is likely to push bond yields lower resulting into lower cost of funds for Indian corporates, ICICIdirect said. 

For 2024, ICICIdirect likes as capex cycle theme, a combination of core sectors, green growth and PLI. It likes cement stocks as healthy utilisations are likely amid expanding capacity, steel as capacity is likely to double amid green focus, automobile as the premiumisation trend getting stronger, banks due to strong earnings and real estate, thanks to a decadal revival.