Stock recommendations: The domestic stock market is reeling under heavy pressure, leading to a steep collapse in benchmarks. BSE Sensex and Nifty50 hit their new 52-week lows last week. Last week would be the worst for the benchmark indices, where Sensex fell nearly 3,000 points and Nifty50 tumbled about 1,000 points. Both indexes are just inches away from the bear grip.
The looming fears of global recessions and stagflation are among the markets’ worst nightmares as inflation concerns over geopolitical concerns now startle the world and central banks try aggressively to tame it.
As market experts predict more volatility in the future, they suggest that investors look for a pool of good stocks that can do well in the next two to three years, especially in the bear market.
“The next two to three months should be a transitional phase for the economy and we need to brace ourselves for higher volatility, we need to stick to quality stocks and not panic and leave,” said Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial services
So, here are a few stocks whose valuations are significantly below their respective 52-week highs, which is why Amarjeet Maurya, AVP – Mid Caps, Angel One Ltd recommend buying these stocks.
CMP Rs 132 | Target price Rs 162 | Upward 25%
Ashok Leyland Ltd (ALL) is one of the leading players in the Indian CV industry with a 32 percent market share in the MHCV segment. The company also has a strong presence in the fast-growing LCV segment. We believe the company is ideally placed to absorb the resurgence of growth in the CV segment and will be the largest beneficiary of the government’s voluntary scrapping policy, so we rate the stock as a BUY.
HDFC bank is the largest private sector bank in India with an asset book of Rs. 11.3 lakh crore in FY21 and deposit base of Rs. 13.4 million crore. The bank has a very well-diversified portfolio, with wholesale accounting for approximately 54 percent of the asset portfolio, while retail accounts for the remaining 46 percent of the loan portfolio. Given best-in-class asset quality and the expected recovery in growth from Q2FY22, we are positive on the bank given reasonable valuations at 3.0xFY23 adjusted book which is discounted from historical averages. We value the stock at 3.7xFY23 adjusted book and arrive at a target price of Rs. 1859.
CMP Rs 1290 | Target price Rs 1610 | Upward 25%
PI Industries is a leading player in providing custom synthesis and manufacturing solutions (CSM) to global agrochemical players. The CSM business accounted for more than 70 percent of the company’s revenues in FY22 and is expected to be the primary growth engine for the company going forward. The company has increased its share of high-margin CSM business through strong relationships with global agrochemical players.
CMP Rs 2,475 | Target price Rs 3,440 | Upward 39%
HCL Tech (HCLT) ranks among the top four India-based IT service companies and offers a huge range of services such as ADM, Enterprise solutions, infrastructure management services, etc. At CMP, the stock trades at a P/E multiple of 21 .5 xFY23 EPS estimate, which is at a significant discount to the other major IT companies such as Infosys and TCS and offers tremendous value at current levels given its industry leader status in infrastructure management.
CMP Rs 959|Price Rs 1,348|Upside 41%
Marico is one of the largest FMCG companies in the hair oil, edible oil, food and personal care segment. Marico’s products have a strong brand memory combined with an extensive distribution reach of more than 5 million points of sale and a direct reach of approximately 1 million points of sale. Marico has a strong balance sheet, free cash flow and higher profitability. We expect Marico to report a healthy bottom-line CAGR of ~11 percent for FY2022-24E as a result of better volume growth driven by a strong brand and broad distribution network.
CMP Rs 473 | Target price Rs 600 | Upward 27%
The expert opinions and investment tips in this News18.com report are their own and not the website’s or its management. Users are advised to contact certified experts before making any investment decisions.
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