Nifty50 at 25,000 by end-2024? Here's what investors may expect on Dalal Street after a stellar 2023

Who doesn’t like attention? India emerged successful in gaining the cynosure of all eyes in 2023, according to a report by domestic brokerage ICICI Direct.  

 "Indian equities was clearly an outperformer compared to most global peers in CY23, more in mid and large-cap space. Interestingly, this was amidst geopolitical tensions, rise in key policy rates across the globe and volatile commodity prices," said the report.

The brokerage’s remarks reflect the sharp outperformance of the country’s capital market to its global peers in the outgoing year despite escalating geopolitical tensions, volatile commodities, and hikes benchmark interest rates across the globe. 

While Indian equities notched a substantial 20 per cent on both the headline indices in 2023, the US Dow Jones Industrial Average logged around 14 per cent gains. 

Domestic macroeconomic data emerged strong throughout 2023, boosted by increased capex, high GST collections, and double-digit earnings growth by India Inc, according to the report, dated December 29.  

What can market participants expect on Dalal Street in the election year, 2024? 

While India continues to be on a strong footing given the key macroeconomic indicators, such as strong GDP, favourable commodity prices, and hopes of reduction in benchmark lending rates across the globe, ICICI Direct underlines three forms of risks that can play spoilsport:  

* Global growth slowdown 
* Escalated geopolitical tensions (if any)  
* Any COVID-19-related negative surprise  

 The brokerage has pegged the Nifty earnings CAGR at 16.3 per cent over FY23-26, following 22 per cent over FY20-23.  

Where can you expect Nifty and Sensex at end-2024? 

 The brokerage has pegged the Nifty and the Sensex at 25,000 and 83,250 at the end of December 2024, respectively. ICICI Direct values the headline index at a price-to-earnings (PE) multiple of 20 times the estimated earnings per share (EPS) of Rs 1,250 for FY26, and expects the 30-scrip gauge to deliver a potential upside of around 15 per cent from the current levels.