The estimation was done using the firm’s forward-return framework that combined expected earnings growth, potential valuation rerating and a median dividend yield of 1.30 per cent.
From a current Nifty level near 22,800, those assumptions forecast about 43,000 and 46,500 under a best-case scenario.
“These are not predictions of where the NIFTY will trade, but mathematical outcomes based on fundamentals, reasonable earnings growth assumptions and potential valuation rerating,” said Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital.
Gupta said that doubling of the index may sound ambitious, but over five years it translates to an annualised return of nearly 15 per cent.
The report also examined historical valuation cycles, noting eight distinct episodes over 27 years in which the Nifty’s price-to-book ratio breached 2.8-fold and stayed below that threshold for at least 90 days. This amounts to roughly one episode every three years over the past 27 years.