Equity Outlook Model Note

01 Summary

The whole note in one minute

The model shows a small tilt above neutral, not enough to raise equity.

• Cheap valuations, the historical record after similar falls and the statistical projection lift the outlook.
• The macro picture is the main drag: costly crude, rate hikes in India and the US, and a weak monsoon.
• FII Outlfows are still a concern and dampened due to adverse oil prices.

02 Scorecard

Seven paradigms and where each one points. The needle shows where they land together

1. 1StatisticalStrongly positive

   Twenty history-based methods were combined. Most point to a higher Nifty a year from now, though the range of outcomes is wide.

2. 2ValuationsStrongly positive

   The Nifty trades at a P/E of 19 against a 10-year median of 23.3, and at 2.7 times book value against a median of 3.6.

3. 3Base ratesStrongly positive

   After the last two long sideways phases, the Nifty rose 32% (2023–24) and 33% (2017) over the following twelve months.

4. 4EarningsPositive

   Profits are still growing at a healthy pace, but full-year forecasts have been lowered and profits are a record share of GDP.

5. 5TechnicalSlightly positive

   The market looks oversold on RSI and Bollinger bands, but the Nifty is still below its 200-day average and momentum is negative.

6. 6FlowsNegative

   Domestic funds have bought more than foreigners have sold, but heavy IPO supply and foreign short positions cancel that support.

7. 7Macro economicStrongly negative

   Crude is above $100, the RBI and the US Fed have both raised rates, and the monsoon was weak. Growth is the one bright spot.