Mumbai: Nifty companies are likely to witness a modest growth in the second quarter of the current fiscal, but will fare better thereafter on account of sustained policy reforms, above normal monsoon and benign interest rates, says a report by ICICI Securities.
Accordingly, the stock brokerage has revised its Nifty target upwards at 9,600 for one year forward.
As per the report, "Nifty earnings continued to grow modestly in the first quarter of the current fiscal."
The overall Nifty earnings for the three months ended June rose by 3 percent over the same period year-ago.
It further said that a modest earnings growth will sustain for July-September quarter of the current fiscal.
"We continue to believe that the improving economic growth aided by sustained policy reforms, above normal monsoon and benign interest rates can result in earnings upgrade cycle improving further from hereon," the report said.
ICICI Securities also noted that Indian equities are unlikely to see "sharp correction".
"Unlike the rally at the beginning of calendar year 2015 which was at odds with the continued downgrades in earnings, the current rally has support of stable earnings so far in calendar year 2016," the report said.
The brokerage is overweight in consumer discretionary, financials, cement and industrials, while it is underweight in telecom, utilities, energy and metals stocks.