File photo of BJP's prime ministerial candidate Narendra
Modi
Foreign brokerage UBS Securities has said it expects the Nifty at 6,900 if the markets start
believing in a positive election outcome and that its sees a 15 per cent earnings growth in FY15.
"Markets have not priced in a positive election outcome yet. Investors indicate that markets are hoping for a Modi-led government," UBS said in a report.
(Also read: Modi rally in markets? Why you should be cautious)
"Nifty at 6,900 will be a possibility if markets start believing in a positive election outcome, based on 15 times the PE and 15 per cent earnings growth in FY15."
A more euphoric sentiment among investors could imply higher multiples. Current valuations for Nifty at 14 times of one year forward PE imply that a positive election outcome may not yet be priced in, it said.
"Investors suggest that opinion polls have aided expectations around increased probability of a Modi government," the brokerage added.
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