Fairval

Notes on Indian equities, sectors and economy

Sensex likely to trade between 11K to 13K for 2008

Posted by fairval on July 31, 2008

Market risks look weighted on the downside.

1Q09 earnings look generally disappointing. Looks like FY09 earnings growth could end up close to 10%, or definitely less than 15%. Which means, forward PE could trend down to around the historical low of 11x. So where does the market go?

This means we are looking at the pessimistic scenario in the above table (from Mar’08 post). Or a median sensex value of around 11,500. My guess there is a good chance Sensex could trade between 11,000 to 13,000 for a large part of rest of the year. The inflation genie (one thing missing in the 3 Mar 08 post, once released, is very hard to control

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