Here’s What Brokerages Forecast For 2020
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Here’s What Brokerages Forecast For 2020

Large-cap stocks helped India’s benchmark equity indices to gain in 2019 even as broader markets fell because of poor corporate earnings and a slowing economy.

As a volatile year for the markets nears a close, analysts are optimistic about 2020.

Here’s what brokerages forecast for 2020:

Morgan Stanley

  • Morgan Stanley expects India to outperform emerging markets in 2020 on the back of better growth and reasonable valuations.
  • The outperformance will happen if the policy action continues, Morgan Stanley Equity Strategist Ridham Desai wrote in a note.
  • The brokerage’s December 2020 Sensex target is 45,000, an upside of 8 percent.
  • The bull case Sensex target is 50,000 and bear case target is 35,000.
  • The view is premised on corporate tax cut aiding investment cycle, accelerated government expenditure and pick-up in exports.
  • Morgan Stanley forecasts earnings growth at 20 percent in 2019-20 and 23 percent in FY21.
  • Value and growth stocks will beat quality stocks for 2020.
  • Domestic cyclicals to beat global sectors, and small and mid caps to beat large caps.
  • Morgan Stanley has overweight rating on consumer discretionary, industrials and financials in their model portfolio and is underweight on technology, healthcare and materials.


  • UBS has a base case target of Nifty at 12,300 by June 2020 based on 18x forward price-to-earnings multiple.
  • The upside and downside scenarios are at 13,300 and 10,300, respectively.
  • Gautam Chhaochharia of UBS pointed out the tail risks in Indian markets after the recent rally. First, data that shows four months of power generation decline, reflecting the growth slump in India. Second, retail inflows into equity markets have been key to support Indian markets over the past four years, despite weak earnings momentum.
  • UBS economist Tanvee Gupta expects a modest recovery in economic growth from the quarter ending December.
  • UBS said some green shoots could be squeezed out in the current gloomy backdrop though: petrol/diesel demand recovery, tourist arrivals/airline volumes, rail cargo (excluding coal volume) and PMIs.
  • UBS is overweight on financials, property, oil and gas, power utilities, life insurance and telecom. The brokerage is underweight on autos, IT and small- and mid-cap stocks.
  • UBS recommends Asian Paints Ltd., Axis bank Ltd., Bharat Petroleum Corporation Ltd., Britannia Industries Ltd., Cipla Ltd., Godrej Properties Ltd., ICICI Bank Ltd., NTPC Ltd., Petronet LNG Ltd., Reliance Industries Ltd. and SBI Life Insurance Company Ltd.

Credit Suisse

  • The economic slowdown may continue to worsen, which has been led by industry destocking, Neelkanth Mishra, chief India strategist at Credit Suisse, wrote in a note.
  • Mishra said flows into domestic mutual funds had slowed from the peak but were stabilising at levels higher than seen historically.
  • Mishra said policy interventions to get growth rebound to 6.5 percent levels were not politically challenging, but it was unclear when these actions might be taken.
  • Credit Suisse is overweight on financials, telecom, utilities and metals and underweight on discretionary, cement and industrials.
  • It’s overweight on SBI, ICICI Bank, ICICI Prudential Life Insurance Company Ltd., Bharti Airtel Ltd., Power Grid Corporation of India Ltd., Tata Steel Ltd., Dr. Reddy’s Laboratories Ltd., Lupin Ltd. and Tech Mahindra Ltd.
  • Credit Suisse expects 2020 to see an inflection point in risk.
  • FY21 EPS growth could still be reasonable at 12-14 percent, though below current estimates of 28 percent.
  • Mishra expects narrow market performance to continue for now as economic uncertainty continues to push funds into “safe” stocks.


  • Citi said it was a protracted road to a weak recovery in FY21.
  • Improvement in bank balance sheets, repairing dislocation in the shadow banking or real estate and lagged effect of fiscal and monetary stimulus could influence growth trajectory, Citi Economist Samiran Chakraborty said.
  • The government will plan to return to the fiscal glide path in FY21 and is likely to set fiscal deficit target of 3.4 percent of GDP, he said.
  • Surendra Goyal, analyst at Citi, expects macro recovery to be protracted and earnings to be high.
  • Citi’s December 2020 Nifty target is at 12,700, as valuations are expensive in the historical context, indicating limited upsides.
  • Continued quantitative easing by global central banks and trade war resolution could help emerging market equities in general, resulting in moderate returns for India, Goyal said.
  • Citi is overweight on financials, healthcare and industrials and underweight on consumer staples, materials (excluding cement) and auto.


  • JPMorgan expects high earnings per share growth, lower policy rates, and optionality on public sector banks’ recapitalisation.
  • The brokerage said the key risk was high equity valuation.
  • The brokerage expects modest returns from Indian equities in a high-volatility environment, JPMorgan’s Bharat Iyer wrote in a note.
  • Iyer lists out four reasons why a modest recovery in growth is expected in the second half of FY20—a more favorable base effect; an above-normal southwest monsoon; government spending coming back after the general election; and lagged impact of monetary easing.
  • ICICI Bank, HDFC Bank Ltd., Ambuja Cements Ltd., NTPC and SBI are the top picks by JP Morgan. Lupin and Godrej Properties are among the least preferred stocks.

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