Sensex target: Factoring in the fall in inflation, comfortable CAD, improved sentiments and pick-up in GDP growth, we expect the Sensex EPS to grow at a CAGR of 17% over FY14-17E. A decline in cost of equity coupled with a dovish environment will further fuel portfolio flows for India in equities as well as debt instruments. The Sensex is trading at 15x one year forward P/E multiple(FY16E), in line with historical mean. However given the resurrection of corporate earnings cycle, we believe there exists a case for a re-rating of the Indian markets. We assign a P/E multiple of 15x on FY17E EPS to arrive at a fair value of 32500 by end CY15, implying an upside of 18.6%. The corresponding Nifty target would be 9750.