Macquarie says the Indian ‘elephant’ will turn to ‘tiger’ in 2013. It has raised its BSE Sensex target to 22,200 versus 21,600 earlier and Nifty target to 6,900 points as against 6,600 previously.
The investment bank expects the reforms push would take India to eight per cent per annum growth over the next three years, improving to 6.7 per cent in FY14 from 5.6 per cent projected in FY13.
Corporate earnings growth may surprise on upside around 16-17 per cent as the Street is not factoring in improvement in Ebitda margins with neither falling core inflation nor reduction in interest costs getting built in, the note says. Cyclical sectors are even cheaper and are at a 10-year low as compared to defensives, it says.
The investment bank has added Axis Bank, State Bank of India and property developer DLF to its top 10 ideas, replacing ICICI Bank, Dr Reddy's Laboratories and HDFC Bank.
