The equity market has been showing huge growth momentum over the past few years and the benchmark NSE Nifty index is now expected to reach 27,867 points in the next 12 months. Currently at 24,945 points, this means it can grow by 12%. In this case, if Nifty breaks above this level, some stocks will surge higher. Did the brokerage disclose these stocks and explain why these stocks can rise?
PL Capital said in its latest India strategy report that Nifty’s current one-year expected EPS (earnings per share) is 19.4 times, higher than its 15-year average PE (price-to-earnings ratio) of 1.6%. The premium is high. In this scenario, PL Capital expects the Nifty valuation to rise 20x in 12 months at a 15-year average PE premium of 5%, thus giving a bullish target of 29,260 (previously 28,564). On the other hand, if there is a decline, then Nifty may reach 25,080 in this scenario.
Continue to focus on these industries for 12 months
The financial services company believes that capital goods, infrastructure, ports, EMS, hospitals, tourism, new energy, e-commerce and telecommunications are emerging industries worthy of attention. However, this should be available through valuation. PL Capital further said that market and street forecasts are already based on strong demand surge in the upcoming festive and wedding season and any disappointment in demand during this period could lead to further decline in EPS forecasts.
These industries may usher in a double boom
PL Capital said Nifty’s earnings per share fell by 3.8% and 2.8% in FY2025 and FY26, respectively. However, EBIDTA in the hospitals, pharmaceuticals, capital goods and chemicals sectors is expected to grow strongly. Additionally, automobiles, banks and durable goods are also likely to post double-digit growth.
These industries are under pressure
The brokerage said there were signs of improvement in demand for staples in rural areas, although some impact of prolonged rains may be felt in second-quarter results. Discretionary spending in sectors such as travel, accommodation, jewelery and two-wheelers remained positive, while passenger vehicles (PV), quick service restaurants (QSR), apparel, footwear and construction materials continued to face challenges. It also said infrastructure spending and project orders have picked up but FY25 is likely to be unstable due to upcoming elections in Maharashtra, Jharkhand and Delhi.
These 6 stocks will be Nifty heroes
PL Capital removed Siemens, Praj Industries, Apar and Lupin from its high-confidence picks list due to recent share price gains. However, in the medium to long term, these names are positive. PL Capital, on the other hand, counts Bharat Electronics, Crompton Consumer, Cyient, JB Chemicals, Jindal Stainless Steel and Safari among its confidence picks. This means these stocks can show huge growth.
(Note – Before buying or selling any stock, please seek help from a financial advisor.)
