Reliance Securities, Stock Recommendations for Diwali Samvat 2072Top stock Pick Hexaware, Persistent, HDFC Bank, IPCA Lab and Shriram TransportAfter three good Samvats, the last Samvat can at best be termed as a mixed and volatile one for investors. This is considering that from October 2014 (last Diwali) until March 2015, the Nifty scaled new highs, surging over 17% to scale a peak of 9,100+. However, post this, various domestic and global developments led to the market getting into a corrective mode and losing ~17% from its life-time highs. Thus, in conclusion, Samvat 2071 saw the Nifty end flat with a ~2% gain.
However, it must be noted that the Indian market has outperformed its emerging market peers in this period. Notably, the Indian benchmark index has registered a marginal riseas compared to ~12% decline in emerging market index in the last year. The relative outperformance indicates the global and domestic investors’ outlook towards the Indianeconomy over the medium-to-long-term.
Thus, while factors like the impending US Fed interest rate lift off, slowdown in China, missing growth in the Eurozone and delayed recovery of the Indian economy has unnerved a section of the market, we believe there are several factors to look forward to, which should help Indian equities to perform going forward:
> CPI Inflation at 4.4% for September 2015 is at the lowest level since India started computing this index in January 2012
> The near 50% correction in crude oil prices in the past one year and over 60% collapse since its recent highs of ~US$110/barrel has not just contributed its bit in bringingdown inflation as fuel prices correct, but has had a significant positive impact on India’s current account deficit also
> The correction has not been restricted to just oil prices, but has been witnessed across commodities as a basket, on account of the Chinese slowdown concerns, whichis reflected in the CRB Commodities index also correcting by ~30% in the last one year and ~40% since its previous highs, which puts India in a relative better standingcompared to other competing emerging markets like Brazil and Russia
> RBI’s monetary policy stance has been accommodative over the last one year, as it has cut interest rates by 125bps since December 2014. This is likely to provide support to domestic economic recovery in the coming quarters
> For an economy expected to grow at 7%-7.5% over the next couple of years, which is also the world’s fastest at the current juncture, and expected to improve going forward, Sensex valuation at ~15.5x FY2017E earnings and ~13x FY18E earnings will attract capital at every available opportunity.
Thus, in conclusion, while the Indian stockmarket may have been volatile in the last one year, during Samvat 2072, several opportunities disguised as short-term challenges are expected to come investors’ way. Notably, some opportunities are also currently available, which we believe are well-placed for the year ahead.
However, before we go on to reveal the investment opportunities for Samvat 2072, we are happy to bring to your notice that once again, our Diwali Muhurat recommendations portfolio for Samvat 2071 has outperformed the Nifty by a wide margin of 17.7%! Notably, while the Nifty is up a mere 2.2%, our recommended portfolio has generated a return of 19.9% in the same period, which also translates into a 9x return compared to the Nifty!
In the above backdrop, and with elevated hopes and confidence to assist you in your wealth creation, we bring to you our recommendations for Samvat 2072.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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