The current situation where the world is grappling with outbreak of coronavirus, the economic impact of lockdown across economies is making a dent on global market performances.
Many experts say it is time to pick big and strong companies from the pack and add them to your portfolio.
"The COVID-19 hit has generated great opportunities for everyone to invest in quality business models at attractive valuations. This opportunity is being presented to investors after 12 long years and should not be missed. Investors should focus on investing in right economy, right Sector, right Business models & rightly compliant Companies," Amit Jain, Co-founder & CEO at Ashika Wealth Advisors told Moneycontrol.
The benchmark and broader indices are still in negative terrain with Nifty50 falling 23 percent and Nifty Midcap index 25 percent year-to-date.
Experts also feel once the lockdown opens in coming weeks, all industries will gradually back to normal levels in coming months which could be reflected in earnings and economies probably in second half of FY21, especially after the financial package of nearly Rs 21 lakh crore announced and expectations of one more package for demand revival by the government.
"Amidst this gloomy backdrop, gradual opening up of the economy provides a silver lining. Thus, we believe the interplay of health and economic crisis would hold the key to markets in the near term," Motilal Oswal said.
Hence, Aashish Somaiyaa, MD & CEO at Motilal Oswal Asset Management Company advised that one should avoid panic and remain invested.
"On the other hand, if you intend to take benefit of the current panic, do not jump in all at one go. Any top up in equity or a rebalance of your asset allocation from debt into equity should be done systematically step by step between now and September 2020," he said.
Here are top 21 stocks as listed by experts that can create wealth in the coming years:
R Venkataraman, MD, IIFL Securities
We expect SBI Life Insurance and ICICI Lombard to do very well in the medium term. Companies like Hindustan Unilever will establish their leadership even more strongly, as will Pidilite.
In the banking space, Kotak Mahindra Bank and ICICI Bank will do well.
Telecom will also continue to do well and Bharti Airtel should outperform even from here, despite being up nearly 55 percent in six months.
Pharma will continue delivering upside over the next two-three years. The US business profitability is set to improve over the next two years. We prefer Cadila Healthcare, Dr Reddy's Labs and Aurobindo Pharma, as they have the best product fit to take advantage of the circumstances. For these three companies, the valuations are also not too rich.
Hemang Jani, Head - Retail Equity Strategist, Motilal Oswal Financial Services
FMCG: The sector provides goods that are in constant demand, thus providing stable earnings regardless of the state of the economy. (HUL, Nestle, Dabur, Tata Consumer).
Healthcare: It is a defensive play. Though the sector has been under pressure for the last few years, this pandemic opens up a lot of opportunities for the sector. Diversified players (Dr Reddy's Labs). Some unique plays would be API manufacturers (Divis Labs, Ipca Labs, Alkem Labs), Diagnostic labs (Dr Lal PathLabs), medical insurance (ICICI Lombard).
Specialty Chemicals: Increasing trend of de-risking of procurement from China by global chemical leaders. Additionally, depreciation of rupee and sharp correction in crude prices should also benefit (PI Industries, SRF).
Telecom: One sector which has seen rise in usage and continued business operations. With the lockdowns and work from home, usage of phone and data has increased multifold. With consolidation phase over in telecom, we can expect improving tariffs which would support financials in the next 2-3 years (Bharti Airtel and Jio through Reliance Industries).
Select Private Banks: Many private sector banks are well-capitalized and could be looked at post the sharp correction. We believe this is a great buying opportunity from a longer-term horizon as they are quality compounders and would also gain from the consolidation in the market (HDFC Bank, ICICI Bank).
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The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
