HCS Worldwide Increase Optimism On India’s Sensex Stocks. Wealth Management firm HCS Worldwide have improved their outlook for India’s Sensex stocks following a revival in rainfall in the nation.
India’s Bombay Stock Exchange Sensitive Index may rise to 16,500 by September 2010, as a revival in rainfall and farm output lowers the risk of a “sharp” decline in economic growth and company earnings, HCS Worldwide told clients on Friday.
HCS Worldwide raised the target by 14 percent as it forecasts the index will trade at 15.7 times 2011 earnings per share, estimated at 1,052 rupees for the 30 stocks in the Sensitive Index in the year ending March 2011. The Sensex fell 0.7 percent to 16,153.47 at 10:24 a.m. Mumbai time, having gained 67 percent this year.
In an emailed note to clients and investors, HCS Worldwide’s regional analyst team said that given the revival of India’s monsoon rainfall over recent weeks, concerns over a sharp fall in agricultural output have now subsided. Further to the increase rainfall, urban consumption remains resilient they said.
India’s monsoon rainfall, the main source of irrigation for the nation’s 235 million farmers, was above average for a second week, improving prospects for bigger crops of winter-sown wheat and oilseeds, HCS Worldwide analysts told investors in the emailed note.
Over the past four weeks rainfall has been normal or higher than normal after posting two weeks of significantly deficient rainfall in early August, HCS Worldwide said in the note.
Maruti Suzuki India Ltd. was added as one of HCS Worldwide’s top picks as investor concern over domestic consumption has eased as monsoon rainfall increased, the email said. Infosys Technologies Ltd., Tata Consultancy Services Ltd., Tata Steel Ltd., Steel Authority of India Ltd. and Jindal Steel & Power Ltd. remain among HCS Worldwide’s top selections. Ranbaxy Laboratories Ltd. and State Bank of India remain among its top sell recommendations.
