Earnings downgrade persisted throughout 2015, as Corporate India had to brace severe global headwinds and lack of demand in the domestic economy. We expect FY16 Nifty EPS growth to be flat. This is a big downgrade of 16% during the year. Risks to our bottom-up estimates of FY17 growth of 20% persists and will likely see downgrades in 1HCY16.
Motilal Oswal expects Sensex EPS CAGR of 14% during FY15-18, significantly higher than the 7% CAGR witnessed during FY08-15.
Expect Sensex EPS at 1,366 (up 1%) in FY16, 1,643 (up 20%) in FY17 and 1,996 in FY18 (up 21%).
At 1643 (Fy17 Earnings) *15(Historical P/E) = 24,645 SENSEX Fair Value
