In the backdrop of eco-corporate up-cycle, macro tailwinds (inflation, oil) and increased risk appetite (business & consumer), India should generate earnings growth-led returns. Citi's new Dec 15 Sensex target: 31,000 (+16%), at India’s 10-year mean multiple
(15.5x)
Citi is OW: earnings momentum/upgrades (Pharm - upgrade, Cement), balance sheet revaluation (Banks), economic reforms (Energy).
It is UW: high multiples/ moderating demand (Staples), regulatory overhangs (Minerals, Utilities), and stay
Neutral: high earnings revival/ pick-up expectations (Capital goods, Autos, IT services – downgrade).
