Indian equities are expected to remain flat over the next three months, according to Goldman Sachs, which predicts a modest 3% gain for the benchmark Nifty 50, targeting 24,000 points. This follows a recent downturn, driven by a weak earnings season and high valuations, which have pushed the market into correction territory.
Key Highlights:
- Goldman Sachs maintains a “marketweight” stance on Indian equities, predicting a near 3% rise for the Nifty 50, reaching 24,000 points within three months.
- The forecast is a reversal from the previous month’s projection, which predicted a slight decline to around 24,500 points.
- Indian markets have recently slipped into correction territory, with the Nifty and Sensex down more than 10% from their all-time highs on September 27, impacted by high foreign outflows and underwhelming earnings.
- Goldman anticipates a back-loaded recovery, with growth picking up towards the end of the year. The Nifty is expected to hit 27,000 points within 12 months, signaling a 16% potential gain.
- Despite the correction, valuations remain high, with the MSCI India index still trading at 23x forward PE, above the fair-value estimate of 21x.
- Goldman Sachs expects Indian companies to achieve 13%-16% earnings growth in 2025, supporting a long-term target for the Nifty.
