American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Speed bumps ahead? Goldman Sachs downgrades outlook on Indian stocks, lowers Nifty 12-month target to 27K

by admin October 23, 2024
October 23, 2024
Speed bumps ahead? Goldman Sachs downgrades outlook on Indian stocks, lowers Nifty 12-month target to 27K

Goldman Sachs Group Inc. has downgraded its outlook on Indian equities from overweight to neutral, citing concerns about weakening economic growth and corporate earnings.

The downgrade comes as India’s key stock indices experience sharp declines, with the NSE Nifty 50 Index seeing its steepest monthly fall since the onset of the pandemic.

In a research note released on Tuesday and reported by Bloomberg, Goldman Sachs strategists, including Sunil Koul, said,

“While we believe the structural positive case for India remains intact, economic growth is cyclically slowing down across many pockets.”

They added that worsening earnings sentiment, an accelerating pace of earnings-per-share cuts, and a weak start to the September-quarter results season indicate an impact on profits.

“A large ‘price correction’ is less likely given support from domestic flows, but markets could ‘time correct’ over the next three to six months,” Goldman Sachs strategists said, indicating that Indian equities could face a period of stagnation rather than a sharp correction.

As a result, the firm lowered its 12-month target for the Nifty 50 Index from 27,500 to 27,000, implying only a 10% upside from Tuesday’s closing levels.

High valuations and a challenging macroeconomic environment are expected to limit any significant gains in the near term.

The Nifty 50 currently trades at 20 times its 12-month forward earnings, higher than its five-year average of 19.4 times, signaling possible overvaluation.

Foreign sell-offs, and slowing earnings growth

Indian equities have been hit hard by a wave of foreign investor selling, with overseas funds withdrawing a net $7.8 billion in October, according to Bloomberg data.

This is the largest monthly outflow since March 2020, as foreign investors react to India’s weakening economic data and mounting inflationary pressures.

Analysts have widely raised concerns about a slowdown in earnings growth, citing challenges such as a high base, weakening demand, and shrinking margin tailwinds.

Other leading brokerages, including Motilal Oswal Financial Services, Nuvama Institutional Equities, and Axis Securities, forecasted that Q2 earnings growth would decline to a post-pandemic low, with profit growth expected to sharply moderate to around 2% for the July-September period.

According to MOFSL, this would represent the slowest earnings growth for Nifty companies in 17 quarters.

In terms of sector outlook, Goldman Sachs remains overweight on automobiles, telecom, and insurance, while upgrading realty and internet sectors to ‘overweight.’

Conversely, it downgraded cyclicals such as industrials, cement, chemicals, and financials.

The brokerage advises investors to prioritize quality, earnings visibility, and targeted alpha themes to navigate the current volatility in Indian equities.

The post Speed bumps ahead? Goldman Sachs downgrades outlook on Indian stocks, lowers Nifty 12-month target to 27K appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Tilray Brands stock analysis: attractive risk/reward?
next post
TSMC denies US investigation over Huawei chip dealings amid reports

Related Posts

TJX sees opportunity in Trump’s tariff chaos as...

November 23, 2024

Meme stock mania is back: Why everyone is...

May 17, 2024

Long NOTV: Inotiv Inc Q4 2024 Revenue Up...

December 7, 2024

JEPI forecast: will this covered call ETF rise...

January 6, 2025

Boeing CEO, other executives stepping down amid safety...

March 27, 2024

Why analysts are betting on Richemont and Hermes...

April 9, 2025

Cardano unveils Cardinal to connect Bitcoin users to...

June 10, 2025

The many flavors of Ben & Jerry’s corporate...

November 16, 2024

Dow falls 600 points in worst day of...

May 25, 2024

China stock surge stumbles as investors unimpressed by...

October 8, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • GMS stock jumps 29% on takeover interest from Home Depot, QXO, analysts raise PTs

      June 22, 2025
    • Japan’s rice price surge: what’s driving it and why it could spark a political crisis

      June 22, 2025
    • BofA raises STOXX 600 target amid resilient global growth, warns on Mideast risks

      June 22, 2025
    • Palantir co-founder: US must prevent Iranian nukes

      June 22, 2025
    • Fed governor Waller advocates for July rate cut amid tariff, labor market outlook

      June 21, 2025

    Categories

    • Business (3,199)
    • Investing (2,531)
    • Latest News (2,000)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved