Domestic brokerage Prabhudas Lilladher sets 12-month Nifty target 22,584- QHN

“Nifty is not in a bubble zone as it is trading at a 17.2 per cent discount to the 10-year average which provides comfort,” said Amnish Aggarwal, head of research at Prabhudas Lilladher. “Odds are evenly balanced as headwinds emanating from firm US interest rates, the El Niño impact on crops and inflation, volatile crude, and geopolitical uncertainty still abound,” he added.

The brokerage says state election results could dictate market momentum in the run-up to next year’s Lok Sabha elections. Prabhudas Lilladher is overweight on auto, banks, IT services, capital goods, and healthcare. It is underweight on metals, cement, consumer, oil & gas, and diversified financials. The brokerage has a bull case target of 24,573 and a bear case target of 19,927. The bear case target values Nifty at a 25 per cent discount to the 10-year average P/E, while the bull case target values it at a 7.5 per cent discount.