Nifty 50 Reclaims 20000 Mark Amid Positive Market Trends

Nifty 50 Reclaims 20000 Mark Amid Positive Market Trends

VoM News Desk | November 29, 2023 | 04:08 PM IST | Breaking News | Follow on Google News

Nifty 50 Reclaims 20000 Mark Amid Positive Market Trends

Nifty 50 Reclaims 20000 Mark Amid Positive Market Trends

The Indian stock market is experiencing a robust rally, with the Nifty 50 index surpassing the 20,000 level, driven by favorable domestic and global cues. This surge is supported by the broader markets, with the Nifty Midcap 100 index reaching a record high.

Valuations and Sector Preferences

Currently, the Nifty 50 index trades at approximately 20.3x FY24 and 17.6x FY25 consensus EPS. HDFC Securities views these valuations as fair for FY25 and believes the risk-reward balance is now favorable. The brokerage prefers sectors like large-cap banks, industrial and real estate, power, autos, pharma, OMCs, gas, and capital markets. However, it remains underweight on consumer sectors, metals, chemicals, and small banks.

Top Stock Picks and Growth Prospects

For a 6 to 9 months perspective, HDFC Securities recommends three fundamental stock picks: Manappuram Finance, Bharat Dynamics, and IOL Chemicals & Pharmaceuticals. The firm advises buying these stocks and adding at lower levels for potential upside of up to 10% in two to three quarters.

1. Manappuram Finance | Buy | Target Price: ₹168
   Despite economic challenges, the demand for gold loans is increasing. HDFC Securities expects a CAGR of ~16% in the company’s loan book from FY23-FY26 and a ~24% CAGR in adjusted PAT. The firm suggests buying the stock in the ₹146-150 band and adding on dips in the ₹131-135 band for a target price of ₹168.
2. Bharat Dynamics | Buy | Target Price: ₹1,274
   The firm initiated coverage with a ‘Buy’ rating, citing strong revenue visibility, robust order book, and government focus on defense modernization and indigenization. Revenue, EBITDA, and PAT are expected to grow at a CAGR of 29.2%/42.5%/41.3% over FY23-26E. The stock can be bought in the ₹1,147-1,171 band and added on dips to ₹1,023-1,043.
3. IOL Chemicals & Pharmaceuticals | Buy | Target Price: ₹496.50
   HDFC Securities forecasts a CAGR of 8%, 25%, and 25.3% in Revenue, EBITDA, and PAT respectively, over FY23-25E. The firm suggests buying the stock in the ₹452-458 band and adding on dips to ₹403 for a base case target of ₹496.5.

These recommendations reflect HDFC Securities’ confidence in these companies’ growth potential and their ability to deliver substantial returns in the coming quarters.

VoM News Desk

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