Sensex to touch 22,000 mark in 12 months: Credit Suisse
"The consensus from the industry is that the Sensex companies earnings should be (up) 18-19 per cent. Rising costs and interest rates are expected to weigh on profitability, so on a conservative growth expectation of 15 per cent, it will be possible," Credit Suisse Head India Equity Research Toral Munshi told reporters here.
Munshi said the 15 per cent growth coupled with clarity on foreign investment in retail and insurance, and stabilisation of inflation would enable the Sensex to touch 22,000 points.
She said some of the stocks in the fast moving consumer goods space had touched their lifetime highs during the past week, while others had shed 40-50 per cent due to negative news flow.
"Some stocks are highly valued. They are valued at the markets at 22,000, while some stocks are valued (as) if the markets were at 16,000," she said.
To illustrate her point, Munshi said stocks like Tata Consultancy Services (TCS), ITC, Housing Development Finance Corporation (HDFC) and Hindustan Unilever were valued high, while the valuations of Reliance Communication, Reliance Infrastructure, Steel Authority of India (SAIL) and DLF, were low.