Besides, Citi has estimated 14 per cent growth in Sensex companies' earnings for the current fiscal.
Encouraged by improvement in corporate earnings and decent monsoon forecasts, Citigroup has raised its BSE Sensex target to 28,800 for the fiscal year ending March 2017.
The global financial services major had earlier set a target of 27,000 for the 30-share benchmark index for 2016-17.
As per the Citi's latest report, macroeconomic indicators are showing signs of recovery and the fourth quarter growth numbers have been "good".
"Post an 11 per cent rally led by global cues, fourth quarter earnings and decent monsoon forecasts, the market trades at 16.5x 1-year forward – slightly higher than 10-year mean.
"India earnings/return on equity are attractive in the merging market context - our Sensex target is 28,800 (earlier 27,000)," it said.
Besides, Citi has estimated 14 per cent growth in Sensex companies' earnings for the current fiscal.
The report noted that macroeconomic indicators continue "to suggest improvement - recent fourth quarter GDP growth of 7.9 per cent was encouraging and so have most high frequency macro data points".
"We continue to monitor the sustainability/pace of the same but directional improvement is visible in the past few months' data," it said.
The Sensex on Friday closed flat at 26,843.
