UBS cuts Nifty target by 5% to 8,200

UBS has cut its year-end Nifty target by nearly five per cent to 8,200, citing slow recovery in earnings growth. The brokerage has lowered its earnings growth expectations for Nifty companies to eight per cent for FY16 and 15 per cent for FY17. UBS’ earlier growth forecasts were 10 per cent and 18 per cent for FY16 and FY17, respectively. Its earlier Nifty target for December 2015 was 8,600.

“Our new Nifty target of 8,200 versus 8,600 earlier (incorporating lower growth, still based on 17 times one-year forward price-to-earnings) for end-December 2015 implies reasonable upside post recent market correction,” said Gautam Chhaochharia, head of India research, UBS in a note.

The target implies nearly seven per cent upside from the current levels. The 50-share Nifty closed at 7,688.25 on Tuesday.

Macquarie, Barclays, CLSA and Ambit also have lowered their price target for the Indian markets, citing weak earnings growth.