Sensex to touch 33,000 by Dec: Deutsche Bank

Says high probability of ratings upgrade for India

The analysts at Deutsche Bank on Thursday set a target of 33,000 for the benchmark BSE Sensex by the year-end. “At our target, the Sensex would trade at 18.4× FY16 EPS (earnings per share) and 15.5× FY17 EPS, with earnings CAGR (compound annual growth rate) of 17.7 per cent over FY15-17,” said the Deutsche Bank report. The report said there is a high possibility of a ratings upgrade for India on the back of improving macro economic factors and government action.

"We assign a high likelihood of a sovereign ratings upgrade for India, as most macro indicators have exhibited improvements in past two years," said an India Equity Strategy report released on Thursday.

Research analysts Abhay Laijawala and Abhishek Saraf authored the report.

They added that they expect domestic institutions to play a more prominent role, even as foreign inflows would be aided by institutions which are increasing their India exposure.

Deutsche is overweight on financials, industrials, and materials and is bearish on information technology.