More than 150 companies hit their 52-week lows during Tuesday's trading session, including some renowned largecap names like MRF, Life Insurance Corporation of India (LIC), Adani Wilmar and Asian Paints. However, some of these stocks managed to make a partial recovery from their respective lows.
Interestingly, these largecap counters are down up to 35 per cent from their recent peaks, making them an attractive bet. However, various brokerage firms have divided views on their counters amid the ongoing result season and stock specific news related to these companies.
Asian Paints Ltd, the largest paint company in the country, settled at 2,239.75 on Tuesday, falling half a per cent. The stock tested low of Rs 2,237.05, correcting more than 34 per cent from its 52-week high at Rs 3,394, hit in September 2024. The stock has been hit hard by rising crude oil price, which is a major component for its raw material, along with rising competition with JSW Group and Birla Group entering the paint market.
B&K Securities is expecting a muted growth in the topline for 3QFY25, with flat volumes in the mid-single digits given the muted festive demand, weak consumer sentiments in rural and urban markets. Th brokerage, which sees a sharp contraction in the margins for the company, has a 'hold' rating on the stock with a target price of Rs 2,336.
Nuvama Institutional Equities estimates Asian Paints to grow slower as it dominates big cities, which are facing the brunt of the slowdown. However, we anticipate a gradual improvement in FY26. Pricing continues to be negative due to an adverse mix; entry level range experienced slightly negative pricing actions, it said. Nuvama currently has a 'buy' rating on the stock.
MRF Ltd, which was once bragged as the most valued stock in India, has tumbled nearly 25 per cent from its 52-week high at Rs 151,283.40. The stock rose more than a per cent to Rs 1,14,245.50 on Tuesday, but also tested 52-week lows of Rs 1,12,692.60, with a market capitalization falling below Rs 50,000 crore. MRF, too, is hit hard by rising crude oil prices, which is a major raw material component.
Anand Rathi Shares & Stock Brokers, which has a 'buy' rating on the stock, sees MRF's revenue to remain flat on a sequential basis in December 2024 quarter, while Ebitda margins may also contract during the period. The tyre major is also likely to report a fall in the bottomline in the third quarter for the ongoing fiscal year.
Equirus Securities expects the volume to change by 4 per cent QoQ while realizations are expected to increase 1 per cent QoQ. EBITDA margins are expected to decline due to increasing raw material cost. Equirus said that volumes and margins shall be the key things to watch out for in Q3. It currently has an 'add' rating on the stock.
Adani Wilmar Ltd, also tested 52-week lows at Rs 257.95 on Tuesday, before recovering marginally to close at Rs 266.95, rising about 1.7 per cent for the day. Its mcap has slipped below Rs 35,000 crore. The stock has corrected 35 per cent from its 52-week high at Rs 408.70, including a 20 per cent fall in a week amid the news of Adani Group's exit from the company.
KR Choksey Research said that Adani Wilmar has reported total volume growth of 5.6 per cent YoY, driven by the edible oils segment, which grew by 4 per cent YoY. In Q3FY25, demand for edible oils was impacted by a sharp rise in commodity prices. Malaysia's palm oil prices increased by 27 per cent YoY in Q3FY25, which could affect the company. It has an 'accumulate' rating on the stock with a target price of Rs 373.
State run insurance behemoth, Life Insurance Corporation of India Ltd, has wiped out nearly one-third of its value from its 52-week high at Rs 1,221.50, hit in August 2024. The stock settled at Rs 825.30 on Tuesday, with a total marketcap of more than Rs 5.22 lakh crore. However, the stock hit a 52-week low at Rs 806.85 during the day. The company is facing stiff competition from the private players.
With the implementation of new surrender regulations, LIC has increased the minimum ticket size in many of its products, which is leading to sharper decline in policy count and also affecting the APE growth, said Emkay Financial Services. Trading at a significant discount to its EV, the valuation of LIC is attractive, it said with an 'add' rating and a target price of Rs 1,150.
Kotak Institutional Equities and Antique Stock Broking have a 'buy' rating on LIC with a target prices of Rs 1,250 and Rs 1,260, respectively. Antique pegs value of new business at Rs 1,11,500 crore in FY25, trading at 0.7 times price-to-enterprise value (P/EV).