Nifty could hit 14,407 in next 15 months: Prabhudas Lilladher

Brokerage firm Prabhudas Lilladher is bullish on the Indian market and expects Nifty to hit 14,407 in a 15-month timeframe from now.

The brokerage firm values Nifty FY23 at EPS of Rs 724 at 10-year average PE of 19.9 and arrives at a 15-month target of 14,407 (13,830 based on 19.9 times FY23 EPS of 695).

In the bull case scenario, Nifty may even touch 18,000-mark, the brokerage said.

"Although Nifty has traded at 27 times recently, we continue to take the earlier peak of 25 times and arrive at bull case target of 18,094 (16,680 earlier). Economic revival, sustained global liquidity, low-interest environment and control of COVID-19 pandemic is key to bull case scenario," Prabhudas Lilladher said.

As per the brokerage, Nifty EPS has seen an increase of 2.4 percent for FY21 while FY22 and FY23 EPS has seen upgrades of 4.9 percent and 4.2 percent.

"Nifty EPS is estimated at Rs 461.9, 616 and 723.8 for FY21/22/23. We now estimate Nifty EPS growth of 5 percent in FY21, 33.4 percent in FY22 and 17.5 percent for FY23. Our estimates are higher than consensus by 11 percent for FY21, 8.2 percent/3 percent for FY22/23," said Prabhudas Lilladher.

Nifty is currently trading at 22.9 times 1-year forward EPS which shows a 14.6 percent premium to the 10-year average of 19.9, the brokerage said.

Backed by strong quarterly earnings, positive reports of COVID-19 vaccine and improving macroeconomic indicators, Indian equity benchmark Nifty topped the 13,000 mark on November 24.