Nomura sees Nifty at 15,340 by March'22; sees risks to FII flows in FY22

Nomura sees Nifty at 15,340 by March'22; sees risks to FII flows in FY22

A sharp spike in Covid cases over the past few weeks, movement curbs imposed to in select cities to ‘break the chain’, elevated commodity prices that may stoke inflation coupled with the rich valuation of Indian markets has led Nomura to cut its Nifty50 target to 15,340 for March 2022 (earlier target: 14,680 by December 2021) – a modest rise of 2.7 per cent from the current levels. "The expectation of favorable liquidity conditions (lower cost of capital) and an improvement in the corporate earnings cycle has driven the performance. A potential rise in yields could put pressure on valuation multiples unless expectation of corporate earnings growth surprises materially on the upside. Assigning 18.1x to the current FY23 consensus estimate, we arrive at a March 2022 Nifty target of 15,340", wrote Saion Mukherjee, India equity strategist at Nomura in a note dated April 7, co-authored with Neelotpal Sahu.

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