The Indian share market performance has shown resilience in the last couple of months and has outperformed the major global market by healthy margins, thanks to the country’s robust and superior outlook vis-à-vis other emerging economies.
India now stands tall as the 5th largest market in the world with around $3.5 trillion market cap. Only the US, China, Japan, and Hong Kong market are currently ahead of India. In the last one year, benchmark index Nifty50 has rallied around 21%.
According to analysts at Axis Securities, the macro will continue to drive the market direction moving forward. They believe the market is likely to witness style and sector rotation in the upcoming quarters. "With the robust GDP data, the market positioning is expected to shift toward domestic oriented themes comprising Banks and Domestic-cyclical stocks," they said.
According to Axis Securities, while the medium to long-term outlook for the overall market remains positive, there may be volatility in the short run with the market responding in either direction. "Keeping this in view, the current setup is a ‘Buy on Dips’ market. We recommend investors to maintain good liquidity (10%) to use any dips in a phased manner and build a position in high-quality companies (where the earnings visibility is quite high) with an investment horizon of 12-18 months," it said.
In the bull case, Axis Securities values Nifty at 22x which translates into a Dec’23 target of 22,200. "Our bull case assumption is based on the overall reduction in volatility and the success of a soft landing in the US market. "If the market sails through the next 1 or 2 quarters smoothly, we would likely see the next level of triggers along with money flowing to EMs. This, in turn, would increase the market multiple," it said
Analysts at Axis Securities have an 'Overweight' view on Automobiles, Banking & Financial Services, Telecom, and Speciality Chemicals sectors, and an 'Equal Weight' view on Capital Goods, Cement, Consumer Staples, IT, Oil & Gas, Pharma sectors
From the largecap space, Axis Securities has ICICI Bank among its top stock picks with a target price of Rs 1,150 per share, Maruti Suzuki (Rs 10,790), SBI (Rs 715), Varun Beverages (Rs 930) and ITC (Rs 495)
In the midcap space, Axis Securities has chosen Polycab India, Federal Bank, Ashok Leyland, and Relaxo Footwears as its top stock picks with a target price of Rs 3,905, Rs 155, Rs 190, and Rs 990 per share respectively.
From the smallcap space, analysts at Axis Securities prefer RITES with a target price of Rs 450 per share, Aarti Drugs (Rs 600), Mahindra CIE (Rs 595), Praj Industries (Rs 500), CCL Products (Rs 750), Credit Access Grameen (Rs 1,400), and PNC Infratech (Rs 425)
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