Nifty at 1,00,000 & Sensex at 4,00,000 by 2030

Kshitij Anand, ECONOMICTIMES.COM (click for original article) Dec 8, 2014, 11.09AM IST

NEW DELHI: The Indian market has rallied over 30 per cent in the year 2014. Big Bull Rakesh Jhunjhunwala sees the Nifty touching 1,25,000 by 2030, considering the fact that company or corporate earnings are expected to grow by 16 per cent annually. Jhunjhunwala told a news channel that the Nifty has grown 10 times in the last 15 years and can jump 10-12 times in the next decade.

So, based on the assumption of strong economic growth, bounce back in corporate earnings to double digits and revival in investment cycle, the Nifty and the Sensex can reach these levels which look more like a tall task.

When asked about the targets are they working with for the next 15 years, most of analysts agreed that the bull run is here to say, but said there are caveats and assumptions which needs to get fulfilled first before we can achieve these targets.

If we look deeper into the data, the Nifty has moved from the levels of 943 recorded on 29th April 2003, to 8600 levels as of today (4th December 2014), at an yearly compounded growth rate of above 20 per cent.

"Equities are expected to perform well over the next decade in India along with corporate earnings expected to grow above 15 per cent and EPS of Indian bourses set to move higher, pushing the valuations to these levels," says Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.

By 2018, Kavikondala estimates the Nifty to cross 15000; by 2020, 35000; by 2025, 60,000 and by 2030, he expects the Nifty to cross 1 lakh, keeping in view the strong economy growth.

Most global brokerage firms have expressed their confidence in the India's story with Narender Modi at the helm of things. This is reflected in their overweight stance on the India markets, which have outperformed global markets in the year. The Indian stock market created history last week on Friday, when the total investor wealth hit a record high of Rs 100 trillion in trade on the BSE, which also puts it in the ten largest exchanges of the world in terms of total market capitalisation of listed firms.

India's market capitalisation has risen 41 per cent in 2014, highest among all countries on the back of Rs 93,000-crore investment by foreign institutional investors. 23% of Sensex companies are now owned by Foreign investors.

Markets are currently buoyant and there is still plenty of room for a sustained bull-run on the back of improving macro-economic fundamentals supported by pro-growth policies by the Modi government.

India can grow with 16 per cent CAGR for the next 20 years. Experts believe that such a growth momentum can be achieved as the Indian economy is under the transition phase.

"However one should keep in mind that this is an estimate and cannot be viewed in isolation. There are a lot of implicit assumptions on which it is based. However, if some of those assumptions don't turn out as expected in the future, then of course the estimate might be off-track. Also keep in mind that we have not achieved these figures so far in India for a sustained period, but China, Japan and Korea have achieved for decades" says Vikas V Gupta - Executive Vice President at ArthVeda Fund Management Pvt. Ltd.