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We are in a bull market, Nifty could trade in 16,000-16,500 range in FY22: Ashish Chaturmohta of Sanctum Wealth

However, the resurgence of COVID-19 cases in India is worrying the market with the possibility of large-scale lockdowns, which could dent the economic recovery, he said.

March 22, 2021 / 02:04 PM IST
Stocks that are available at lower price, but have healthy financials and a potential to turn multibaggers are every investor's favourite. On analysis, Moneycontrol found there are only 8 stocks among BSE universe that have met the following criteria - seen an YoY growth in profit and sales numbers in Q3 FY21; increase in holdings by FIIs and MFs (QoQ) in Q3; and witnessed at least 100% jump in stock price in FY21 so far. We considered stocks that were trading below Rs 50 apiece and had a market-cap of more than Rs 100 crore at the start of FY21. The list is dominated by auto ancillary and tyre stocks. It includes Jamna Auto, Lumax Auto Technologies, JK Tyre & Industries. In FY21 so far, the benchmark index Sensex has gained 67 percent, BSE Midcap index and BSE Small index surged 87 percent and 101 percent, respectively. Vinod Nair, Head of Research at Geojit Financial Services said,

Stocks that are available at lower price, but have healthy financials and a potential to turn multibaggers are every investor's favourite. On analysis, Moneycontrol found there are only 8 stocks among BSE universe that have met the following criteria - seen an YoY growth in profit and sales numbers in Q3 FY21; increase in holdings by FIIs and MFs (QoQ) in Q3; and witnessed at least 100% jump in stock price in FY21 so far. We considered stocks that were trading below Rs 50 apiece and had a market-cap of more than Rs 100 crore at the start of FY21. The list is dominated by auto ancillary and tyre stocks. It includes Jamna Auto, Lumax Auto Technologies, JK Tyre & Industries. In FY21 so far, the benchmark index Sensex has gained 67 percent, BSE Midcap index and BSE Small index surged 87 percent and 101 percent, respectively. Vinod Nair, Head of Research at Geojit Financial Services said, "In past few sessions, Indian equities have fallen sharply as US bond yield rose to its highest level since January. Indian markets have witnessed higher volatility compared to its global peers as domestic investors turned cautious on increasing COVID cases in India and falling FII inflows."

 
 
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We are in a bull market and the recent correction is an opportunity to buy, Ashish Chaturmohta, Head of Derivatives and Technical Analysis, Sanctum Wealth Management said in an interview with Moneycontrol’s Kshitij Anand.

We have seen consumption as a theme dominating in the recent years, but now along with this, there is a capex cycle revival expected which has been delayed for the last few years. Cement, construction, steel and capital goods will be the beneficiaries, he added.

Here are edited excerpts from that interview:

Q) The selling continued in the past week as well pushing the Nifty50 below 15,000-14,800 levels. What led to the price action?  

A) In the near future, the rise in the US Bond Yields will be on the back of increasing inflation, this is despite the dovish comments by the US Federal Reserve.

Close

In India, the resurgence of COVID-19 cases is worrying the market with the possibility of large-scale lockdowns, which could dent the economic recovery.

Q) A spike in US Bond Yields spooked markets. Do you see this as a sign of caution or an opportunity for investors?

A) We have seen consumption as a theme dominating in the recent years, but now along with this, there is a capex cycle revival expected which has been delayed for the last few years.

Cement, construction, steel and capital goods will be the beneficiaries.

Thus, we are in a bull market and the correction has provided an opportunity to buy for investors sitting on the sidelines and waiting for a dip.

Q) Despite the muted price-performance, FIIs continue to remain buyers so where is the selling coming from?  

A) Yes, FIIs continue to remain buyers, while the selling is seen from domestic institutions, HNIs, and other value investors.

Nifty has seen a 100% rise from last March's lows, thus rising US Bond yields and worry regarding the second COVID-19 wave is leading domestic investors to take some profits off the table for the time being.

Q) FY21 is coming to an end, what is your outlook on markets for FY22?  

A) The uptrend is expected to continue in FY22. Nifty might see correction, but the broader trend is up and is moving towards 16,000-16,500 levels.

Q) The vehicle scrappage policy is finally out. What will be its impact on sectors? Any stocks that are likely to benefit the most?  

A) This is the most awaited one as it will flush out old, unfit, and polluting vehicles. In the long run, it will improve the fuel efficiency of vehicles, boost localization, increase the availability of low-cost materials for industries and increase GST revenue.

This boost will provide business to Auto OMC and Auto Ancillary, Steel companies, etc. We recommend Mahindra and Mahindra, Minda Industries, and MSTC Limited under this sector.

Q) Any trading ideas for the next 3-4 weeks?  

A) Here is a list of top trading ideas for the next 3-4 weeks:

ICICI Bank: Target Rs 700

In the banking sector, we recommend ICICI Bank, which is a leading private sector bank. The loan growth is showing a strong revival in wholesale, SME, and retail with disbursement in many business segments crossing pre-COVID levels.

The rise in loan growth is led by festive demand, improving economic outlook, and a strong digital ecosystem built by the bank across business segments. We can expect levels of Rs 700 with support placed at Rs 540.

Infosys: Target Rs 1,600

Due to the pandemic, the IT companies have registered a higher spend on cloud, security and digital transformation.

After Q3FY21, Infosys management increased its revenue guidance to 4.5-5% YoY CC (v/s 2-3% earlier) and margin guidance to 24-24.5% (v/s 23-24% earlier).

This bullish guidance was reiterated after Accenture posted its Q2FY21 results, which saw 5 percent YoY revenue growth ahead of its guided range of 1-4%.

We like Infosys for the near-term target of Rs 1,600 levels, and support is placed at Rs 1,250.

Polycab India:

Polycab is one of the India’s leading manufacturers of cables and wires and allied products. Recently, they launched a wide range of consumer electrical products like fans, switches, switchgear, LED lights and luminaries, solar inverters and pumps.

The next level for this stock is seen at Rs 1,650 with support placed at Rs 1,200.

Amber Enterprises:

Amber Enterprises has a 24 percent market share in room air conditioners. It is poised to gain from production-linked incentive schemes.

The stock has seen correction and the uptrend is likely to continue towards Rs 4,000 with support at Rs 2,900.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand is the Editor Markets at Moneycontrol.

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