Goldman Sachs, a global financial institution, has revised upwards its Nifty50 Index target to 23,500 for the end of 2024 from its earlier projection of 21,800 in its mid-November published 2024 outlook report last year. This upward revision now implies 9 per cent INR price/ 12 per cent USD total returns for 2024, led by mid-teen earnings, Goldman Sachs said in its latest India Strategy Report. 

This upward revision has been prompted by the global macro environment shifting more favourably in the past two months, with expectations of firmer US growth, earlier Fed and Asia easing cycles and modest dollar depreciation. This shift has been notably influenced by the dovish stance taken by the US Federal Reserve in December 2023.

STRONG MID-TEEN EARNIGS

With economic growth still resilient in India, Goldman Sachs continues to expect strong mid-teens corporate profit growth in the country. “After an expected 20 per cent earnings growth in 2023, we expect MSCI India profits to grow 15 per cent in 2024 and another 14 per cent in 2025, with growth broad-based across sectors.

As we noted in our outlook report, earnings revisions have stabilised in 2023 after a decade-long EPS downgrade cycle and we expect a turnaround in the earnings cycle, which should primarily drive index returns over the coming years,” said Goldman Sachs economists.  

Meanwhile, Goldman Sachs expects the Reserve Bank of India to cut rates from the third quarter of calendar year 2024 against the earlier forecast of cuts beginning in the fourth quarter of the year. Goldman Sachs foresees India’s GDP growth remaining resilient at 6.2 percent in 2024. 

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