What Drove The Nifty To The New High? Motilal Oswal's Analysis

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.After a roller-coaster ride of 18 months, Nifty 50 finally surpassed its all-time high and touched 19,000 mark in June 2023. The feat was not at all easy! This rally has been led by strong combination of healthy macro and micro, complemented by sharp recovery in foreign institutional investment flows. Strong gross domestic product growth of above 7.2% in FY23, moderating inflation (with headline consumer price index inflation falling to a 25-month low at 4.3% in May 2023), narrowing of current account deficit (to 0.2% of GDP in Q4 FY23), stable crude prices, stable exchange rates and global interest rates nearing its peak, are some of the key macro drivers. Conversely, solid growth in corporate earnings (Nifty earnings up 10% in FY23 on a high base of 34% in FY22) and expectations of high-teens earnings compound annual growth rate over FY23-25E has kept the sentiment buoyant. Our universe posted an earnings CAGR of 26% to reach Rs 8.3 trillion over FY20- 23; whereas Nifty 50 posted an earnings CAGR of 22% to reach Rs 6.3 trillion during the same period. The earnings momentum is likely to remain strong going ahead with our/Nifty 50 earnings projected to clock 19%/17% CAGR over FY23-25.Flows: After reporting cumulative outflows between October 2021 and February 2023, FII flows bounced back strongly in the last four months, with cumulative inflows of $14 billion over March-June 2023 while domestic institutional investor flows continued to remain positive at $4 billion during the same period. The recent recovery in FII flows has pushed the index to an all-time high level. As of CY23 year-to-date, FII inflows stand at $9.7 billion whereas DIIs remain net buyers with inflows of $10.5 billion. Nifty 50 has gained 13% from March 2023 lows and touched an all-time high in June 2023. We note that as of June 30, 2023, Nifty 50 was up 4% and 2% from its October 2021 and Dec-22 highs, respectively..Click on the attachment to read the full report:.Paytm - Raising Gross Merchandise Value, Disbursement Projections By 4-21%: Motilal Oswal.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

What Drove The Nifty To The New High? Motilal Oswal's Analysis

Valuations far more reasonable now than that in October 2021 high.

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