Tata Steel, SBI, Axis Bank, Tata Motors: 9 Sensex stocks down 10-20% from 52-week highs; should you buy?

Tata Steel Ltd, State Bank of India (SBI), IndusInd Bank Ltd, Axis Bank Ltd and Tata Motors Ltd are among nine Sensex constituents that are down 10-20 per cent from their 52-week high levels. These stocks, mainly from interest rate-sensitive banking and automobile sectors, fell, even as the BSE barometer made a fresh record high of 82,725.28 earlier this month.

Tata Steel hit a low of Rs 148 in Monday's trade and is down 19.82 per cent over its June 18 high of Rs 184.60 apiece on BSE. Kotak has a 'Reduce' rating on the stock with a target of Rs 150. InCred Equities finds the stock worth Rs 82. The stock is a consensus 'Hold' based on 28 analyst estimates, as per data publicly available with Trendlyne.

At Rs 1,401, shares of IndusInd Bank are down 17 per cent over January 15 high of Rs 1,694.35. The near-term business outlook for IndusInd bank remains comfortable except for the elevated slippages in the credit card and MFI portfolio, said Sharekhan. 
The stock trades at 1.6 times/1.4 times its BV estimates for FY25/FY26. We believe sustained earnings  progression is key for outperformance along with better outcome on retail asset quality front. Risk reward looks favorable," it said while suggesting a target of Rs 1,750.

State Bank of India and Axis Bank Ltd are also down 14-15 per cent from their June/July highs. For SBI, the fall was mainly led by slashing of its rating to 'Sell' by Goldman Sachs that revised target price on the PSU bank stock to Rs 742 from Rs 841, citing multiple headwinds.

Bernstein recently removed Axis Bank from its model portfolio, as it felt any near-term positive surprise is not around the horizon with the recent spike in credit costs and Citi integration behind.

Tata Motors Ltd, Maruti Suzuki India Ltd, Bajaj Finance Ltd, Mahindra & Mahindra Ltd and Adani Ports and Special Economic Zone Ltd declined between 10 per cent and 11 per cent. 
 
"Barring 2Ws, August wholesale volume performance was muted across most segments owing to inventory correction/shift in festive (Onam) to Sept this year," said JM Financial.

Anand Rathi expects 11 per cent volume growth for two-wheeler makers in FY25. It sees 7 per cent volume growth in M&HCVs, 5 per cent in tractors and 4 per cent in passenger vehicles.

"We retain our sanguine view of the auto sector. Our preferred OEM picks are Hero MotoCorp, Ashok Leyland and Mahindra & Mahindra," it said.

In the case of Bajaj Finance, InCred Equities has suggested a 'ADD' rating on the stock with a target price of Rs 9,000, citing rising product diversity, listing of the housing arm and comfortable valuation. It believes that the asset quality concerns over rural distress for Bajaj Finance are overdone, as it anticipates a positive surprise with a better-than-expected revival in rural India.