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It can’t get bigger than this for investors and traders. Morgan Stanley predicts Nifty to triple in next 5 years to hit Mount 30K while in the short term, it sees Sensex hitting 34000 by June 2018.
“If you remember between 2003-2007 Nifty earnings compounded at 39 percent and the index was up 7-fold, we expect earnings to compound by 20 percent in the next 5 years which could take the index towards 30,000. These are very modest estimates,” Ridham Desai, MD, Morgan Stanley said in the sidelines of 19th India Summit.
One big reason behind the estimates is profit share to GDP is close to all-time low, and we should not forget that it is just a cyclical number and it tends to recover.
Many factors will contribute to push profit share to GDP which includes a recovery in consumption, real wages are turning, exports are picking up, and government infrastructure is at an all-time high. The only missing piece is private capex, but that should also recover by next year.
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