Goldman Sachs bumps up benchmark Nifty 2024-end target to 23,500

Goldman Sachs has raised the 2024-end target for the benchmark Nifty50 index to 23,500, a 9 per cent upside from the current levels on the back of an earnings upgrade and valuation re-rating.

The US-based brokerage had earlier set a target of 21,800.

“Better macro mix led us to raise our Nifty 2024-end target to 23,500 which implies 9 per cent price and 12 per cent dollar total return, led by earnings. Our revised target incorporates 2 per cent higher earnings per share (EPS) and 6 per cent higher target price-to-earnings P/E (19.3x),” Goldman Sachs said in a note.

The brokerage says the global macro environment has turned more favourable compared to two months ago with the expectations of stronger US growth and optimism around rate cuts by the US Federal Reserve.

“While markets have partly priced this, a better growth/rate mix recently led us to raise our Nifty index target, incorporating a higher ‘target’ valuation multiple. We now expect Nifty to reach 23,500 by end-2024 led by mid-teen earnings. We retain our preference for domestic (over external) sectors and large caps (over mid/small caps) and refresh various cyclical and medium-term alpha ideas,” said Goldman Sachs’ equity strategists Sunil Koul and Timothy Moe in a note.

Among the key themes identified by the brokerage are Make-in-India, defence, and energy transition.

It expects companies in the MSCI India index to log earnings growth of 15 per cent this year and 14 per cent in 2025. In 2023, the MSCI India universe posted earnings growth of 20 per cent.