Moneycontrol
Last Updated : Aug 11, 2018 10:14 AM IST | Source: Moneycontrol.com

Looking for value picks? These 18 stocks are still available at 25-40% discount to their all-time highs

The BSE 500 index, which includes all these stocks, fell 7 percent from the start of the year till March 23 and then it rallied nearly 11 percent from that day's closing levels. It is more than 150 points away from its record high of 15,660.94 touched on January 24, 2018.

Sunil Shankar Matkar

Bulls have been leading from the front on the Street for more than a month now. The gradual recovery after February-March correction started in the last week of March. The 30-share BSE Sensex has rallied around 5,000 points from March-lows to hit the psychological mark of 38,000 on Thursday.

While it took more than four-and-half-months to touch that level, the last leg of the gains — 3,000 points — was only seen in the month of July. Even the 50-share NSE Nifty added around 1,500 points from March-lows and is just a few points away from its 11,500-mark.

Overall, the Sensex has gained 11 percent and Nifty nearly 9 percent in 2018. Things are also improving in mid and smallcaps, but they are still down 9-12 percent this year.

"The long-term outlook for Indian equity markets continues to look bright. The government's focus on financial inclusion of masses and raising farm incomes will be a positive for private banking and consumption sectors," Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas, said. However, he sees short-term concerns such as rising crude oil prices and global trade wars.

Nilesh Shah of Envision Capital feels if the rally breaks, it would be only because of global factors (excluding crude which is not a major concern now) and not domestic cues.

After sharp correction seen couple of months ago, lot of stocks, with strong fundamentals and for which analysts expect robust earnings growth, started recovering along with frontline and broader indices, but are still away from their all-time highs hit this year.

We have collated a list of 18 stocks from BSE 500 which are still trading at 25-42 percent discount to their all-time highs which they achieved in 2018. We have taken companies which have more than Rs 10,000-crore market capitalisation.

The list of stocks includes Motilal Oswal Financial Services, Century Textiles & Industries, TVS Motor Company, SJVN, Dilip Buildcon, Interglobe Aviation, Adani Transmission and ABB India. These scrips are 31-42 percent away from their all-time highs.

Sundaram Finance, Jubilant Life, Tata Global Beverage, Reliance Nippon Life Asset Management, The New India Assurance Company, Coromandel International, Sun TV Network, PI Industries, Ashok Leyland and Ramco Cements are 25-29 percent shy of record highs.

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The BSE 500 index, which constitutes all these stocks, fell 7 percent from the start of the year till March 23 and then it rallied nearly 11 percent from that day's closing levels. It is more than 150 points away from its record high of 15,660.94, touched on January 24, 2018.

Experts see the gap between largecaps and midcaps to end in the next couple of months, which narrowed sharply in last one month. They feel despite this recovery, there are many stocks still available at attractive valuations.

“From an investment perspective, some of the good small-caps and mid-caps are available at cheap valuations. The beating they took in last 4-5 months and correction of 40-50% provides ample space for a retail investor to start accumulating value stocks,” Mustafa Nadeem, CEO, Epic Research told Moneycontrol.

“The Strength in broader market is here to stay. We have seen outperformance by the IT sector in the last few months and Pharma has started to show some strength. Auto Sector has seen some weakness. So mostly, it is very selective and rotational in nature,” he said.

Apart from above 18 stocks, there are 14 stocks which are 20-24 percent away from their life highs, which include SRF, Rajesh Exports, Bajaj Auto, ICICI Securities, Hindalco Industries, Supreme Industries, CESC, Godrej Properties, Quess Corp, Oberoi Realty, Indian Hotels Company, Wabco India, Bharat Forge and Emami.

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First Published on Aug 10, 2018 12:59 pm
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