Dated: 31/10/2023 (All details mentioned here were as on 31/10/2023 as published on The Economic Revolution Magazine by VG Stock Research)
As we move ahead with some Diwali Dhamaka the Nifty on Dalaal Street hasn’t moved much since last Diwali. As compared to its Diwali 2022 Nifty has marginally moved from 18012 to give a close this October 2023 @19082 that’s merely 1070 points i.e. 5.95% while Sensex on the other hand moved by 2999 points i.e. from 60746.59 closing on Diwali 2022 to this October 2023 closing @63746 to now closed @63874.93 i.e. 4.95% only.
In this Muhurat Trading / Samvat 2080 investors have lost hope due to recent volatility in the last 4 months. Though Nifty & Sensex both managed to scale new highs of 20222.45 & 67927.23 respectively but majority failed to grab the opportunity due to fear monger over their heads.
Bharat’s GDP currently stands @3.75 Trillion US $ as on September 2023 which is proposed to grow to 6.7 Trillion till 2030, 16.1 Trillion till 2040 & is proposed to grow to 30 trillion US $ till the coming Amrit Kaal in the year 2047. Meanwhile the current Annual growth rate stands in between @6-7% p.a.
Bharat is currently estimated to be 5th largest economy with a GDP of 3.75 Trillion US $. Several estimates show that Bharat’s GDP is expected to overtake Japan & Germany by 2030. Rating agencies S&P estimates that Bharat’s nominal GDP will rise from 3.40 trillion in 2022 to 7.30 Trillion US $ by 2030.
This rapid pace of economic expansion would result in the size of Bharat’s GDP exceeding Japanese GDP by 2030 making Bharat the second largest economy in the Asia Pacific region by 2030. By 2022 the size of Bharat’s GDP has already became larger than the GDP of UK & France making Bharat a 5th largest economy in the whole World. Bharat’s GDP is also forecast to surpass Germany
As per the preliminary data published by the “Niti Ayog” that estimates that Bharat’s economy will need to post an annual average economic growth of 9.20% between 2030-2040, 8.80% between 2040-2047 & 9% between 2030-2047.
By this rate the Stock market is expected to grow significantly to new highs. Without the Capital Market participation the true picture of the economy is not going to reflect anywhere. The Bhartiya subcontinent is expected to boost its economy on domestic levels exponentially. Besides these the initial data shows total number of Demat A/c’s as on March 2020 were 4cr. which has increased to more than 12cr. registered Demat A/c holders i.e. they turned into 3 folds & also this only accounts for merely 8% of Total Bharat’s Population.
Meanwhile back in September 2016 the Bharat’s official every month SIP was Rs. 3,700 cr. which has grown exponentially to Approximately Rs. 16,000 cr. every month & all these money is directly been invested into the markets which also reflects we are no longer solely depended on FII’s for our markets to grow.
Nifty closed @19079.60 up by 5.95% as compared to the Diwali of 2022 closing of 18012. Investors left be-fizzled as they merely got any solid returns over the 1 yr duration. This Samvat 2080 from 19079.60 is expected to grow by approximately 18-25% over next 1yr time frame which may result in whopping 24000 mark by Diwali 2024. Though it’s not going to be a vertical upside but rather with lots of volatility as we have Elections in May 2023 & if BJP comes back to power with majority our estimated possible target of 24000 could be achievable. Unfavorable move could only be witnessed if in any case BJP losses or doesn’t get majority number of seats which doesn’t seem a possibility as of now.
Sensex closed nearly 4.95% since its last Diwali of 2022 & settled on October 2023 @63874.93. The indices is expected to grow nearly 18-22% over the next 1 yr duration on back of growing the investor’s participation in the new era. This means it has the capacity to test 82290-85000 till the coming Diwali 2024. Like Nifty this too holds the sensitivity to BJP winning the election in May 2024.
Bank Nifty on the other hand on the crisp of growth digitization & banking system expected to show a surge of nearly 31% over next 1 yr time frame which denotes the levels of 54600-56500 kind of levels. As without the participation of Bharat’s financials & Banking sector we cannot grow @our desired GDP growth rate. If Bharat has to give a GD growth rate of 6-8% then its Banking & Financials Industry needs to grow @ this desired pace.
Nifty Financials too is not untouched with Bharat’s growth requirement & is definetly expected to grow @30-32% till the Diwali 2024. This means we could possibly get to see Nifty Financials trading near to 24000-25200 till the coming Diwali 2024.
Nifty IT Sector The most beaten up industry lately due to Russia-Ukrain & Israel-Palestine war is expected to bottom out in the coming months & especially in the year 2024. Nifty IT from its CMP of 30588 may move ahead towards 40000 in the next 1 year time frame & is expected to generate returns of over 27% & above.
Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT (Levels As on October 2023 Closing):
Nifty CMP: 19079.60
Nifty Estimated Target: 24000
SENSEX CMP: 63874.93
SENSEX Estimated Target: 82290-85000
Bank Nifty CMP: 42845.95
Bank Nifty Estimated Target: 54600-56500
Nifty Financial CMP: 18888.10
Nifty Financials Estimated Target: 24000-25200
Nifty IT CMP: 30582.25
Nifty IT Estimated Target: 40000
Stock on Radar:
Large Caps:
- Reliance Industries (CMP 2288): This large cap giant holds a whopping 15.52 Lakh cr. as its Market Cap not only this it has weightage of 9.25% in Nifty50 which is second largest in weightage of any stock in the indices. So, if Nifty has to move upside towards 24000 it cannot move without the participation of this giant i.e. Reliance Industries. This giant is expected to grow by nearly 30% in a year or so which could let the stock to test 2988 by the coming Diwali 2024.
- HDFC Bank (CMP 1477): This counter is holding the highest weightage in Nifty50 i.e. 13.24% which denotes without the participation of this stock we cannot be moving upside in the main indices. This counter has been sidelines since 2021 but this is expected to come back from the sleep & test 2000 mark by Diwali 2024 i.e. a whooping upside potential of 35% from hereonwards.
- INDIGO (CMP 2454): The only aviation company which is profitable. Indigo which posted spectacular number in its recent Q2. This giant has the upside potential of 50% over next 1 yr time frame which means this giant may test 3500-3700.
- Wipro (CMP 381): This large cap IT giant has a whopping market cap of Rs. 1.98 Lac cr. The stock has topped out from 740 to low’s of 352 during the recession in Global IT sectors. We expect the black days of IT sector may vanish in next six month & this IT giant may test 530 by next Diwali 2024 i.e. upside potential of nearly 39% from hereonwards.
- LIC (CMP 602): LIC Bharat nearly holds a monopoly business in the country. Stock has been hatred into the hands of retail investors as to non performance since its listing. This stock has the potential to go double from hereonwards. The estimated possible target looks to 1200+ over the span of next 3 years time frame.
- Asian Paints (CMP 2959): This Diwali season something coming out of the box for a discounted rate. This stock looks attractive on CMP 2958-2877 with strict SL placed @2682 for a estimated possible target remains @3500-4200 within next 6 months time frame.
- Infosys (CMP 1368): The heavy weight IT stocks had the worst nightmare since the Russia-Ukrain war begin but the recession is probably going to end soon in 2024. This counter looks like available on some attractive levels. This IT giant looks attractive here & can deliver 30% growth over next 1-1.5yrs time frame i.e. it has the possibility to test 1780 till Diwali 2024 & so on.
Mid- Caps:
- BATA BHARAT (CMP 1566): This mid-cap giant holds nearly Rs.20,000 cr. market cap & has market share of nearly 35% in the leather footwear industry which has shown a increment of nearly 4% annually. The stock has been on the sideline since 2021 & it’s been 2 years this stock is expected to give a symmetrical triangle breakout & is expected to give 21-24% returns over a 1yr time frame i.e. it may test 1900 by Diwali 2024.
- Bandhan Bank (CMP 214): This bank holds nearly Rs. 34,000 cr. market cap. The counter is on the sideline since the peak of covid. The stock has declines nearly 50% since then. This counter looks hot to add for a year or two for an estimated possible target of 300-365.
- Bajaj Elctrical (CMP 1020): The stock has been on the sideline since last 2 years & has the potential to deliver 30% over the next 1 year time frame. The estimated possible target remains @1300+ till the coming Diwali 2024.
- Paytm (CMP 920): The stock holds nearly monopoly in UPI payments in listed entity segment in Bharat. Recently the stock has came above its selling pressure & traded above 900 levels. If these levels sustained we may possibly get to see 1222-1290 over next 6-9 months time frame.
Penny Stock Lovers Counter
- Rajnandini Metals (CMP 9.35): This stock could be gem for penny stock lovers. The stock looks good to accumulate & hold @CMP 9.35 but keep strict SL placed @7.50 for an estimated possible target of 20 in next 6-8 months.
- Malu Paper (CMP 37.65): This micro cap stock standing still in this volatility & remains a hot pick @CMP 37.65 for 3-4 months & can be accumulated on dips towards 36-37 with strict SL placed @30 with an estimated target of 54-64.
About the Author:
Mr. Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 9+ years exploring in depth analysis of the Equity & Derivatives with accuracy of 90% and above.
He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.
Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
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