New Delhi [India]April 29 (ANI): According to a UBS report, the Nifty 50 index is expected to increase by 8 percent to touch the 26000 target in the next one year.
The report also maintained a positive attitude on consumption-oriented areas including retail, staple, two-wheelers (2WS), and travel. It also has a creative approach on financial, real estate, cement and hospitals.
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It states that “8 percent in Nifty 50 bottom-up analysis is expected to reverse that 8% in the Nifty 50s reverse with a one-year target of 26,000. We are positive on retail, staple, two wheelers and travel spreading areas.
However, the firm is less optimistic about industrial and infrastructure sectors. This hopes that several factors will increase the government capital expenditure (CAPEX) to slow down the mid-high single-digit CAGR at FY25-27.
These include fiscal tension from payment of eighth pay commission, about 3 percent in joint fiscal deficit of state governments, and limited social welfare expenses for additional Capex. Private sector investment can also face pressure amidst global development uncertainties.
Broadly vigilant on industrial, UBS highlighted that its industrial team is creative on defense and power equipment price chain.
The report was cautious with the IT sector, citing the risks of potential income due to the high risk of the US and cited concerns about the global recession. However, it was noted that its IT team remains positive on the sector under coverage, assuming that negative risk to current assessment is limited.
It states, “We highlight the UBS industrial team that the defense and power equipment is creative on the price chain. We are cautious on the IT sector, which are cautious due to the risk of potential earnings in view of high risk and concerns over global development recession”.
The report also flagged concerns about generic pharmaceutical export companies, expecting earnings to begin with the second half of FY26.
On the Macro Front, the UBS Economics Team has revised the estimates of its India GDP development downwards, the financial year 26 estimates have trimmed the estimates from 30 basis points to 6 percent and FY 27 to 6.4 percent from 20 basis points to 6.4 percent, which is factoring in the possibility of global recession. However, the effect may be partially offset by low raw value and potential consumption stimulation benefits.
The report believes that financial, staple, retail, two-wheelers, cement and travel sectors are likely to move forward.
However, if global development becomes quite weak, the Nifty can see a negative share of up to 50 6 percent, as unanimous earnings for FY 26 can fall from 13 percent to 8 percent. (AI)
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