Choksey: Nifty50 Bottom Near; RBI Policy On Deck

Market veteran Deven Choksey suggests the Nifty50 could be poised for a recovery. He points out that the price-earnings ratio for the Nifty50 has moved closer to 16–17 times on a one-year forward basis, and even after discounting earnings for war-related uncertainty, history shows recoveries when valuations hit around these levels. He believes a fair-price target around 20 times P/E could be a good bet and emphasizes that a rally could start if positive news starts flowing.

Choksey noted that if capitulation has already occurred, the market may be forming a bottom or may have already formed one. He said, "If positive news starts coming in, possibly you will see recovery in the prices of Nifty50 stocks. Whenever the market has capitulated in a panic situation, we are very close to that kind of scenario. If this capitulation has already occurred, it means the market is either in the process of forming a bottom or has already formed a bottom. In my viewpoint, if this bottom is being made, the following recovery in the market over the next three to six months would be quite handsome, as the underlying tone remains quite positive." He also added, "The fair price assumption for Nifty P/E ratio should be seen around 20, and I think around 20 is a good bet. I think one gets value here."

He also addressed the RBI policy outcome due on April 8, suggesting the policy environment could shape near-term moves. "The government took an early proactive step by reducing excise duty, helping prevent fuel-related inflation pressures," he noted, underscoring how macro risk settings could support any nascent rebound.

In this backdrop, investors are watching how the policy outcome might steer sentiment, with global cues and easing crude prices providing a backdrop for potential strength in equities. A constructive surprise on growth or earnings could help sustain a broader recovery in the months ahead.

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