Amid the ongoing volatility on the domestic equity market, as many as 170 stocks in the BSE 500 have lost over 25 per cent of their value from their respective 52-week high levels. The benchmark BSE Sensex is down 7 per cent from its 52-week high of 62,245.43, scaled on October 19, 2021.
With a fall of 58 per cent, Strides Pharma Science emerged as the top loser in the list. Shares of the company declined to Rs 393.75 on February 8, 2022 against its 52-week high of Rs 946.80. Vaibhav Global, PNB Housing Finance, Sequent Scientific, Dilip Buildcon, Jubilant Pharmova, Spandana Sphoorty Financial, Wockhardt and Ujjivan Small Finance Bank also slipped between 50 per cent and 58 per cent from their respective 52-week highs.
Market watchers believe that a couple of factors, including selling by foreign institutional investors, uncertainty over the new Covid variant, mixed quarterly results, rising inflation and crude oil prices and expectations of multiple interest-rate hikes this year by the US Federal Reserve sap investor sentiment.
Commenting on the domestic equity market, brokerage Motilal Oswal Financial Services said, “Valuations are slightly rich with Nifty trading at 20x FY23E EPS and thus the corporate earnings delivery becomes highly crucial, more so in a rising rate regime. We prefer BFSI, IT, consumer, telecom, metals and cement while we are underweight on auto and energy.”
The data further highlighted that players like Solara Active Pharma Sciences, IndiaMart InterMesh, Aegis Logistics, RBL Bank, Bajaj Consumer Care, General Insurance Corporation of India, Hikal, Bank of India, Venky’s (India), Vakrangee, IOL Chemicals, Ruchi Soya Industries, HEG, Gulf Oil Lubricants, Cadila Healthcare and Tasty Bites Eatable also slipped between 40 per cent and 48 per cent from their respective 52-week high levels till date.
From the list, YES Securities is positive on IndiaMart InterMesh with a target price of Rs 7,225. “The Q3 result was below expectation as business recovery from Covid induced lockdowns continued to be gradual. Small and medium enterprises continue to face adverse economic environment due to frequent lockdowns. It continues to be a leader in B2B online classified with around 70 per cent market share," YES Securities said.
Likewise, CLSA recently upgraded RBL Bank to ‘Buy’ with a price target of Rs 200. The global financial services firm believes that risk-reward for the bank is better following the recent underperformance.
Going ahead, brokerage Motilal Oswal Financial Services prefers players like ICICI Bank, SBI, L&T, Axis Bank, Reliance Industries, Bharti Airtel, Infosys, Hindustan Unilever, Titan, and Hindalco in the largecap space. It is also positive on Ashok Leyland, Oberoi Realty, Indian Hotels, Devyani International, Zensar Tech, Indigo Paints, Gujarat Gas, Orient Electric, and VRL Logistics in the midcap space.
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