PL Capital (Prabhudas Liladhar) has recommended defensive and cyclical recovery plays in the current market during a webinar. This includes defensive posture in industries like pharmaceutical and utilities and cyclical play in capital goods, metals, cement, engineering in case of de-escalation in geopolitics. The brokerage also recommended capital goods, defense and infra-related sectors on the structural growth theme.
Resilience Amid Risk
Amnish Aggarwal, co-head – institutional equities, PL Capital said that India has stayed quite resilient despite all those risks because of certain governmental policies like cuts in oil taxes. However, the second order effect of higher crude prices may still emerge. Inflation might increase significantly within the next few months, and expectations for growth and profits may be adjusted accordingly.
Vikram Kasat, head-advisory, PL Capital said that an increase in investment trend new themes like artificial intelligence, robotics, and specialized manufacturing was observed from HNIs and institutions amidst the war in West Asia.
Tactical Outlook
The brokerage also said that based on the data from derivative trades, the markets appear to be range-bound in the short-term with Nifty trading in a wide band while waiting for clear signals. Based on the technical analysis, it said that the metals, banks, and automobile sectors are doing well, while textiles and chemicals have a possibility of a turnaround.