Brokerage firm Motilal Oswal has seen a potential upside ranging from 8-92% in 10 mid-cap stocks which have already corrected within a range of 11-40% from their respective 52-week highs.
After the recent correction in October, the benchmark Sensex is down nearly 9% from its August record high. The mid-cap index has, however, underperformed the headline index and is down 18% since its January record high level. Even as the mid-cap index continues to deliver negative returns year-to-date, a recent report has picked 10 mid-cap stocks which, despite a steep correction of up to 40% from their 52-week highs, can nearly double your money — delivering returns of up to 92%.
After the end of the second quarter earnings season, brokerage firm Motilal Oswal has seen a potential upside ranging from 8-92% in 10 mid-cap stocks which have already corrected within a range of 11-40% from their 52-week highs. These 10 stocks include names like Marico, Shriram Transport Finance, RBL Bank, Exide Industries, Tata Chemicals, JSPL, Oberoi Realty, Mindtree, Crompton Greaves Consumer Electrical and TeamLease Services.
In the same report, the brokerage firm has also handpicked 10 large-cap stocks which have slipped up to 27% from their 52-week highs and could deliver gains of up to 9-40%. These 10 large caps are Reliance Industries, HDFC, Infosys, State Bank of India, ICICI Bank, Maruti Suzuki, L&T, Axis Bank, Titan Company and Hindalco. while Motilal Oswal sees an upside of 31% in Reliance Industries, Hindalco could deliver up to 47% returns, the report showed.
According to the report titled “India Strategy: Q2 FY18 earnings report”, India Inc’s September corporate earnings-report season was broadly in line with the brokerage’s expectations as far as the Nifty earnings were concerned. “While the underlying earnings story is improving (better revenue growth trends, corporate banks’ asset quality turning around, etc.), new risks to earnings are also emerging (Autos, NBFC). Consequently, the direction of the earnings revision is still trending down,” Motilal Oswal said.
While 73 companies saw earnings cut of over 3%, 38 companies saw upgrades of over 3%, the report said. Axis Bank, Bajaj Finance and Hindalco have seen healthy earnings per share (EPS) upgrades of 11%, 7.6%, and 6.6%, respectively. On the other hand, Tata Motors, Ultratech Cement, IndusInd Bank, and Cipla have seen EPS downgrades of 78.9%, 22%, 17.7%, and 16.8%, respectively.
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