“In the end, we have to sell when basically the reasons for purchasing a company in the first place are not valid anymore.” - Francois Rochon
It's the last trading session of a good year for investors. The Nifty is up about 19 percent as the market gears up to end the year in the green. Despite a slow start, the market momentum picked up after March and scaled new highs. Higher-for-longer rates, outbreak of a fresh war in the Middle East, and a banking crisis in the US could not keep investors at bay. India's inclusion in the JPMorgan bond index, presiding over the G20 Summit, ongoing capex cycle and some political certainty supported the bulls. Going into 2024, all indicators seem to be backing the bulls. But, a little caution is also warranted.
"It would be best to enter 2024 with expectations of low returns from the market. There is very little value in the market across the capitalisation spectrum after the recent run-up in the mega-cap names, the last bastion of value in the market until recently," write Sanjeev Prasad, Anindya Bhowmik and Sunita Baldawa of Kotak Institutional Equities, in their strategy report.
Lupin (Rs 1,339.95, +4%)
Shares gained after the company received the FDA approval for eye medication. One week ago, it got the approval for gout and diabetes drugs.
Bull case: New launches for US markets bodes well as pricing pressure has faded. The company is betting big on respiratory portfolio doing well. On
the charts, an important key candle at the breakout along with bullish oscillators indicates further up-move in Lupin.
Bear case: Frequent USFDA inspections, lower margins than peers will continue to be a challenge.
Hindustan Copper (Rs 270.40, +14.97%)
Shares gained as the stock was removed from the F&O ban list on December 28. It was back on the F&O ban list on December 29.
Bull case: Copper prices are near a four-month peak. Healthy dividend payout. Borrowings have decreased in the past few years
Bear case: Stock is trading at 80 times its trailing earnings. It has gained 133 percent this year making it a prime candidate for Govt OFS
Greenpanel Industries (Rs 418.20, +6.63%)
Trading volume on December 28 stood at 5 million - over 8.5 times the 20-day average. A high-frequency trading (HFT) firm was also active in the stock.
Bull case: A proxy to the real estate boom. Mutual funds as well as foreign investors have increased stake in the last quarter. Can gain market share from low-end plywood segment with implementation of BIS norms
Bear case: Margins have taken a hit due to high timber prices. MDF (medium density fibreboard) imports from Vietnam, Thailand remain elevated
Zomato (Rs 123.20, -3%)
Shares fell after the company received a Rs 402-crore show-cause notice from the GST authorities over unpaid dues.
Bull case: Long-awaited net profits are in sight. Only listed player in a duopoly. Blinkit revenue is zooming. Mutual funds have been big buyers despite expensive valuations
Bear case: The tax outgo could dent the bottomline, though the management believes it is not liable to pay any. The Swiggy IPO next year could take away some sheen off Zomato.
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