Goldman Sachs recommends staying "underweight" in Indian equities on a three-month horizon as equities may slide further on the back of "a sluggish domestic and global growth outlook." However, adds "the trough in NIFTY is behind us". Goldman recommends staying "market weight" on 12-month horizon, says one-year target for the Nifty at 5,600 is underpinned by 12.7 times multiple on fiscal 2014 EPS of 438 rupees/share. "Equities may start to price a recovery in FY14 as well as a better external backdrop," Goldman says. Goldman favors Indian defensive and domestic demand-driven sectors and says to "underweight" global growth and investment-cycle sectors such as banks and commodities.
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