Tirthankar Patnaik, Religare Capital Markets has expressed his projections for the Sensex in current financial year and the free, frank and candid opinion on the future projection for sensex is as appended below:
We have a Sensex target of 18,000 for the end of the year where we are looking at earnings growth of about 8% for the rest of FY12 and 12% for FY13. This is at a discount to the consensus numbers where we believe that the rupee depreciation over the last quarter or so is something that analysts will start accounting in their numbers beginning the third quarter. So if you look at the Sensex EPS, we are looking at about Rs 1120 for FY12 and FY13 we are looking at about Rs 1250. From a valuation perspective, from this EPS, we are taking a 20% discount to the long term average. The Sensex has traded at roughly 16 times over the last 20 years and we are looking at 13 times for our target. We believe that given the current slowdown in the economy, where we are expecting 6.4% for FY12 and a marginal pickup to 7.1% in FY13, there is no reason for the market to rerate just yet. So 13 times multiple should give us about 18,000.
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