India’s Nifty 50 index is expected to increase by almost 7% within the next twelve months and reach a high of 20,700 by June 2024, according to analysts at Goldman Sachs. They believe that the strong corporate earnings will be a driving force behind this growth. The strategists at Goldman, led by Sunil Koul, stated that India is the best structural growth story in the Asia region. Macro vulnerability appears low, and activity data and earnings trends have been improving, they added. The equity market in India has a strong track record of monetizing the economic backdrop.
India has been the top performing market in Asia in the second quarter in terms of dollar gains, Goldman said. The Nifty 50 rose by 1.1% last quarter, compared with a 0.7% rise for China’s blue-chips index. Earlier this week, the Nifty 50 hit a fresh record high of 19,434.15 points.
However, Goldman also expects consolidation in Indian equities in the third quarter due to a lack of immediate upside following the index’s recent rally. They anticipate a pick-up in the subsequent quarter leading up to the festive season. Eventually, they believe the index will hit 20,700 by June 2024, driven by earnings growth in the mid-teens.
So far this year, the benchmark index has already risen by about 7%, compared to a 3.6% increase in MSCI’s index of Asian shares excluding Japan. It closed flat at 19,398.50 points on Wednesday.