Dear All,
Forwarding you the Result Preview for 4QFY2011.
Markets to climb earnings growth ladder
Latest developments related to food inflation, fiscal deficit and interest rates look positive and we believe improvement is likely in these macro indicators going forward. More importantly, the market has been largely range-bound for entire FY2011 (the Sensex is up just about 10%), even though earnings growth has been reasonably healthy. As the market increasingly starts acknowledging and factoring in FY2012 and FY2013 earnings growth, in our view, the Sensex will get a springboard for further upsides.
We believe for the 8-8.5% real GDP growth that India still looks set to achieve and the resulting strong 17.4% CAGR in Sensex earnings, a target P/E multiple of 15x on FY2013E EPS looks reasonable. In this context, even after the recent bounce back, the Sensex is looking reasonably valued, available at 15.4x FY2012E EPS, almost 10% lower than its average P/E of 16.7x since April 2004. In fact, even continuing with this 10% discount, our 15x target multiple on FY2013E EPS translates into a Sensex target of 22,326 by March 2012, on account of healthy earnings growth expected. This implies an upside of 15%, with further upsides likely as valuations move closer to the average P/E. Hence, we maintain our positive stance on the market, with an overweight view on interest-sensitive sectors such as banking and infrastructure.
Kindly click on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6864 / 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6864,6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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