Domestic equity market has been in bears’ grip this year so far. Benchmark indices BSE Sensex and NSE Nifty fell over 3 per cent on Thursday for the first time since January 6, 2015 on account of massive sell-off in bank, power, realty and stocks coupled with weak global cues. Sensex plunged 807.07 points to close at 22,951.83, while Nifty tanked 239.35 points to settle at 6,976.35.
In the current sell-off 229 shares on the BSE hit their fresh 52-week low on Wednesday and so far over 700 stocks hit their new 52-week lows this calendar year till Feb 10, 2016. According to market experts, tepid global cues, continued selling pressure by foreign institutional investors and crude oil slumping sharply are mainly impacting domestic markets in the present scenario. The continuous surge in yen and gold is also keeping equity investors on the toes.
Sensex and Nifty along with sectoral indices such as BSE Power, Auto, Bankex and Realty are hovering at their fresh 52-week low levels.
Some of the stocks that hit their 52-week low so far include Punjab National Bank, Allahabad Bank, Adani Ports, Lux Industries, Andhra Bank, Bank of Baroda, Bank of India, BHEL, Central Bank of India, Dena Bank and DLF. Similarly, Hindalco Industries, Idea Cellular, IOB, PNB, SAIL, Suzlon Energy, Tech Mahindra and UCO Bank too touched their 52-week low level.
On upcoming trading sessions, Vinod Nair, head, fundamental research, Geojit BNP Paribas Financial Services, said, “The road ahead looks jittery with the upcoming Union Budget and the deepening slowdown in the rest of the world.”
Jayant Manglik, president, retail distribution, Religare Securities, said, “We have seen good amount of selling pressure in the quality stocks also in last two trading sessions, which is indeed not a positive sign. Considering all, we suggest to uphold extra caution in leveraged trades and keep them hedged.”
Below are 5 stocks on which market experts are looking bullish in the current market scenario
Bata India: Footwear major Bata India on Wednesday reported 27.53 per cent rise in net profit at Rs 44.56 crore for the third quarter ended December 31, 2015-16. The company had posted a net profit of Rs 34.94 crore during the same period of last fiscal, 2014-15. Religare in a research report said, “With management’s sharpened focus on enhancing Bata’s e-commerce platform to cater to a larger customer base, we build in a 15 per cent topline CAGR over FY15-FY18E. We have maintained ‘Buy’ rating on a stock with a March 2017 target price of Rs 630.”
HCL Technologies: According to Angel Broking, HCL Technologies shares were at attractive valuations and is factoring all the bad news. The share price of the company can touch Rs 1,038 in the next few quarters.
Cadila Healthcare: Cadila Healthcare posted 38 per cent rise in consolidated net profit at Rs 390 crore for the third quarter ended December 31, on the back of robust sales in the US market. The company had posted a net profit of Rs 282 in the same period of previous fiscal. Total income of the company rose to Rs 2,428 crore for the third quarter compared with Rs 2,205 crore in the corresponding quarter of the previous year on a consolidated basis. Sharekhan in a research report said, “We believe, a strong presence in the US market, higher number of product filings and approvals in the subsequent years, will aid the growth in the US market. We have maintained our earnings estimates for FY2016, FY2017 and FY2018. We have also maintained our ‘Buy’ rating on the stock with a price target of Rs 396.”
Bajaj Auto: Bajaj Auto is one of the few Indian manufacturing OEMs with a global presence/market share. On the financials front, around 82 per cent of the business operates at nearly 20 per cent EBITDA margin. ICICI Securities in a research note said, “The company is following the right strategy, by launching new products in higher growth segments (economy & premium). We have ‘Buy’ rating on the stock with a target price of Rs 2,650.”
Repco Home Finance: For the quarter ended December 2015, Repco Home Finance reported net profit of Rs 38.58 crore, up 25.50 per cent, against Rs 30.74 crore in the corresponding quarter a year ago. According to Edelweiss, Repco Home Finance operates in a niche segment, which is under-served by banks and larger housing finance companies. In this backdrop, the brokerage house expects the company to be key beneficiary of growth opportunities in the mortgage finance sector, particularly in non-salaried segment and tier II/III locations. Edelweiss has ‘Buy’ rating on the stock with a target price of Rs 790.