Nifty 2023 outlook positive; new year to offer profitable stock-specific opportunities; Check top stock picks

The year 2022 was the year of returning to normalcy after the pandemic hit. During the year, Indian economy dealt with supply bottlenecks caused due to geopolitical issues, hot inflation, and sluggish growth. However, the Indian economy, and accordingly stock markets, outperformed. While equity markets globally have fallen so far this year, Indian benchmark indices BSE Sensex and NSE Nifty 50 have risen around 2% in 2022. Now, valuations are not very attractive, according to analysts. “2023 may see the end of the rising interest rate cycle but growth may not be impressive. Corporate earnings may not justify higher valuations and the market may enter into a time correction as India will still remain best among the rest,” said Religare Broking in its report.

2023 Market Outlook

According to the brokerage firm, this new year will bring a lot of profitable stock-specific opportunities for investors. Initially in 2022, the Nifty index slipped lower after its failed attempt to reclaim the record high in the beginning and made a low at 15,191.10 in June month. However, the tone changed in the latter half and the index pared all the losses and reached a new record high at 18,887.60 levels in December. “Currently, the index is hovering around the upper band of the range amid mixed signals from the global front, especially the US markets. From the medium-term perspective, Nifty should hold decisive above 18,700 to start the next leg of the up move else the time-wise correction would continue,” said analysts at Religare Broking.

Top stock picks for 2023

Maruti Suzuki: Maruti is a debt-free company with healthy financials, consistent dividend payout, and generates strong free cash flow. “Maruti has reclaimed the record high after spending nearly 5 years in a corrective phase. It is seeing normal correction and gradually inching toward the major support zone. It may spend some time here before resuming the trend,” Religare Broking said.

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Voltas: The company will continue to benefit from positive industry trends given its leadership position, strong product portfolio, and pan-India distribution presence. “Voltas has been witnessing correction for eight months, after the breakdown from a consolidation range. It has reached the support zone of the fibonacci retracement and looks extremely oversold. Besides, the existence of a support zone around the previous swing high i.e. 740 levels should act as a cushion,” the brokerage said.

Exide Industries: Strong demand from the replacement market as well as recovery in the Automotive and Industrial segments would aid in gaining market share. “Exide has recently ended the 4-year-long corrective phase, with a breakout from an inverse head & shoulder. After the initial surge, it is witnessing a gradual decline and inching closer to the neckline(support) area of the reversal pattern. This fall is an opportunity for those who missed the chance earlier,” analysts said.

V-Guard Industries: Analysts at Religare Broking are positive on the growth prospects of the company given the strong demand from housing and real-estate sector, focus on high-margin products, expanding manufacturing facilities and synergies with acquiring company Sunflame Ent. “V-Guard has been trading in a broader consolidation range for the last five years and currently trading around the upper band of the same. The recent price action combined with a surge in volumes indicates a strong possibility of a breakout. Its relative strength within the sector is further adding to the positivity,” they said.

Birlasoft: Analysts are positive about Birlasoft long-term growth on the back of improving demand, robust order inflow, strong relationships with partners and clients. “The IT index has been in a corrective phase since the beginning of the year and Birla Soft is trading in tandem with the trend. It is trading in a declining channel and retraced to the major support zone of long-term moving average i.e. 200 EMA on the weekly chart. It has already tested the lower band of the pattern thrice and now we expect the 250-270 zone to act as a strong support,” they said.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)