Sensex At 1,00,000 Only A Matter Of Time, Says Jefferies' Chris Wood

Greed & Fear cites earnings growth trend and valuations for the optimism.

<div class="paragraphs"><p>Christopher Wood poses for a photograph. (Photographer: Kiyoshi Ota/Bloomberg)</p></div>
Christopher Wood poses for a photograph. (Photographer: Kiyoshi Ota/Bloomberg)

It's only a matter of time before the Sensex touches 1,00,000, according to Jefferies' Christopher Wood, who reiterated his bullish view on Indian stock markets.

This target is achievable assuming 15% growth in earnings growth and a five-year average forward price-to-earnings multiple of 19.8 times, Wood wrote in his Greed & Fear note.

Indian bull markets will continue to climb the proverbial wall of worry, according to the note. One worry emerges from questioning whether the Modi government will be re-elected and another potential risk arises from a further reduction in retail investor activity, after stock markets have traded in a tight range, the note said. Active brokerage accounts fell from a peak of 3.8 crore accounts in June 2022 to 3.1 crore in April 2023.


Greed & Fear highlighted the "huge outperformance" of the Indian private sector bank index compared with the global banks index since it was established in April 2005. The Nifty Private Banks Index has risen 1,073% as compared a 20% decline in the MSCI AC World Banks Index during this period. Indian private sector banks have been the best equity investment story in Asia within Greed & Fear's Asia ex-Japan long-only portfolio since its inception.

However, the risk of Modi not being re-elected is much lower despite the recent defeat in Karnataka, according to Wood. In state elections, local issues tend to dominate as compared to a general election with a focus on bigger issues where Modi has brought about "dramatic changes" in the past 10 years, he said.

The domestic asset management story of India continues to be attractive, the note said. Equities account for an estimated 4.7% of household assets of Rs 11.1 lakh crore at the end of March, Wood wrote, highlighting the opportunity. The inflows into domestic equity mutual funds continue to pour in, dominated by systematic investment plans.

The SIPs have been the key reason for the resilience of the Indian stock market during the recent monetary tightening cycle, with monthly SIP contributions averaging Rs 13,150 crore over the past 12 months.

Changes In Portfolios

Wood lowered China's and Australia's overweight in the Asia Pacific ex-Japan relative-return portfolio, while increasing  India, Korea and Taiwan.

Here are the key change:

  • Asia Pacific ex-Japan relative-return portfolio: 

    • China and Australia’s weight to be cut by 2% and 1% respectively

    • India, Korea and Taiwan to gain 1% weight each.

  • Asia ex-Japan long-only portfolio: 

    • Investments in HDFC Life Insurance Co. and Standard Chartered Plc to be replaced by investments in SBI Life Insurance Co. and Zomato Ltd.

    • The investment in Vale Indonesia removed while investment in will be reduced by one percentage point. 

    • The investments in AIA Group, PT Bank Central Asia Tbk, Bajaj Finance Ltd., Godrej Properties Ltd. and Macrotech Developers Ltd. to be increased by one percentage point each.

  • India long-only portfolio: 

    • Investment in Zomato introduced with a 4% weight at the cost of HDFC Life Insurance being removed.

    • Investment in REC Ltd. will be increased by 200 basis points by shaving the investment in Oil & Natural Gas Corp.

  • Global long-only equity portfolio:

    • Zomato will be added by shaving investment in and Alibaba by 2% each.

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