When will Sensex hit the magic number of 1 lakh? Here are some back-of-the-envelope calculations

As traders busily debate whether Sensex will rack up another 2,700 points this year to break past the all-time high of 62,245.43 reached in the fall of last year, long-term investors are making back-of-the-envelope calculations. when will the index reach the magic figure of 1 lakh.

Earlier this year, Christopher Wood, the global leader of equity strategy for India and Jefferies, said a Sensex target of 1 lakh in FY27 is eminently achievable and now Dalal Street’s veteran fund manager Hiren Ved has said even earlier possible in 2025.

Other market experts also see the magical figure not too far away.

“We think Sensex can reach 100,000 by April 2024. Sensex goes through a cycle of greed and fear every 8 years. It’s in the greed cycle that will end in April 2024,” Apurva Sheth, chief of research at Samco Securities, told ETMarkets.

Now let’s take a look at the history of the Sensex. Two decades ago, in October 2002, the index was below 3,000 points. After 10 years, in October 2012, the Sensex itself gave multibagger returns and passed the 19,000 mark.

Four years ago, in October 2018, the index stood at 34,000 and today it hovers close to 60,000.

“Over the past 20 years, the Sensex has multiplied from 3,000 to 60,000. If the market rises by 15%, which is likely, then in less than 4 years the Sensex will cross the magical 1 lakh mark,” said Kamlesh Shah, president of the Association of National Exchanges Members of India (ANMI). ).

He said that once global macroeconomic concerns regarding inflation and interest rates stabilize, India will become the preferred investment destination as it is the fastest growing major economy and plans to grow a $5 trillion economy by 2025-26. become.

Last year, the famous value investor Raamdeo Agrawal realized from

had predicted that if Sensex continues to grow at an annual rate of 15%, it could reach the 2 lakh mark within a decade.

If India Inc operating profit growth is tracked at 15-16%, if the Sensex grows at 15% it will double every five years.

Chris Wood also showed a similar calculation earlier this year to predict that the Sensex will hit 100,000 in FY27 or sometime in late 2026, with an EPS of 15% and an earnings multiple of 19.4, which is also a five-year average.

Despite all the ups and downs in 2022, the Indian stock market is one of the rare oases of peace in the global markets.

“I think India is moving from being a part of the global emerging markets to a single country allocation. We will get money on our fundamentals and earnings growth,” said Nilesh Shah of

AMC.

(Disclaimer: Recommendations, suggestions, views and opinions of the experts are their own. They do not represent the views of Economic Times)

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