The broader markets have outpaced the benchmark equity indices since Diwali 2023. The BSE MidCap and BSE SmallCap indices rallied 40% and 36%, respectively, and the BSE Sensex advanced 23% during the period. Market watchers believe that robust buying by domestic investors kept the sentiment upbeat on D-Street.
Data shows that 538 stocks more than doubled investors’ wealth since last Diwali. Among these, 18 stocks experienced a significant surge of over 1,000%. With a rally of 3,702%, Bharat Global Developers advanced the most. The scrip jumped to Rs 676 on October 28, 2024 from Rs 17.78 on November 12, 2023. The rise shows that an investment of Rs 1 lakh in the stock has now grown to Rs 38 lakh.
Marsons (up 3,641%), Eraaya Lifespaces (up 3,282%), Hindustan Appliances (up 2930%), Aayush Wellness (up 2,805%), Ceenik Exports (up 2,344%), BITS (up 1,987), Ace Software Exports (up 1,922%) and Diamon Power Infrastructure (up 1,800%) were among other major gainers.
The return came despite some jitters in the past one month due to heavy selling by foreign institutional investors (FIIs) and escalated geopolitical tensions and talks of incremental flows into China given the announcement of stimulus.
Of late, the BSE MidCap and SmallCap indices have cracked 8% each from their respective all-time highs scaled in September 2024. On the other hand, the 30-share index Sensex retreated 7%. Going ahead, brokerage ICICI Direct is bullish on the market with setting 12-month target for Nifty at 27,500 with sectoral preference towards capital goods, infrastructure, private banks, asset management companies, select auto, IT and pharma counters.
TechNVision Ventures, Jagsonpal Finance & Leasing, Aerpace Industries, Kaycee Industries, Cinerad Communications, Ahmedabad Steelcraft, Ashika Credit Capital, Mini Diamonds (India) and Fratelli Vineyards also rallied more than 1,000% since Diwali 2023.
Going ahead, ICICI Direct advised investors to utilise equities as a key asset class for long-term wealth generation by investing in quality companies with strong earnings growth and visibility, stable cash flows, RoE and RoCE.
Lemonn Markets Desk suggested zeroing in on IT, FMCG and Pharma counters. “The IT sector is emerging as a key area of interest, showcasing solid earnings performance and is one of the top sectors to watch out for.
Rebound in the second half of FY25 is anticipated for the FMCG sector, driven by the continued recovery in rural markets supported by a strong monsoon season, alongside expectations of stabilisation in urban demand trends. The sector’s inherent defensiveness during volatile periods positions it well.”
Lemonn also prefers the pharmaceutical sector due to strong earnings visibility and defensiveness in the face of market volatility.
While sharing its Muhurat Picks for Diwali 2024, ICICI Direct suggested players such as Sansera Engineering, PCBL, NCC, Tech Mahindra, Tata Power, NATCO Pharma and HDFC AMC.
On the other hand, Sharekhan said, “Taking a leaf out of the Mahabharata, don’t be an Abhimanyu in the market’s Chakravyuh. It’s wise to be like Arjuna, and to know the art of getting out of Chakravyuh.” It added that the time has come for rebalancing portfolio and increasing exposure to large caps and at the same time cutting exposure in the small and mid cap space, and be very selective, while investing in small and microcaps and exiting companies, where valuation is at astronomical levels with little margin of safety.
“Investors should view current market weaknesses as valuable buying opportunities for constructing a top-tier portfolio aimed at riding the multi-year economic upcycle in India and use the opportunity for wealth creation over the coming years,” Sharekhan said.
The brokerage is bullish on stocks like Allied Blenders & Distillers, Bajaj Finserv, Bharti Airtel, Caplin Point Laboratories, Dabur India, Dee Development Engineers, Hi-tech Pipes, HUDCO, L&T, Mastek, Powergrid Corporation, Reliance Industries, SBI, Suntech Reality and Tata Motors for Samvat 2081.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.