Experts say that the recent fall in the stock market has opened many opportunities. However, there are still adverse conditions like high oil prices, margin pressure for companies, Ukraine-Russia war, global inflation, rising Covid cases in some parts and policy tightening.
Barring metals, most of the major sectors saw a growth of 5 to 10 per cent from March 7 to March 22. These included IT, auto, pharma, banks, consumer durables, finance and FMCG. But these sectors are still trading below their record highs in 2021.
Mrinal Singh, InCred Asset Management, said, “Inflation risks, geopolitical tensions, rising oil prices and rising interest rates have affected the markets and there has been a good correction. However, it is important to understand whether their effect on the market is temporary in nature. ,
Inspired by the statement of Benjamin Graham, the father of value investing, Mrinal Singh said that in the near term, markets act like a voting machine and hence these factors lead to corrections in the stock market. However, “it also gives us an opportunity to buy good quality shares at a discount to an intrinsic value, which also provides margin safety.”
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Here are 5 stocks on which coverage was initiated with ‘Buy’ ratings:
Star Health and Allied Insurance
Star Health is the largest standalone health insurance company with superior market share and operating performance.
ICICI Direct expects Star Health to maintain its leadership in the retail health segment with sustainable long-term opportunities.
“With premium growth of 23-24 per cent CAGR and focus on underwriting profits, it is expected to outperform its RoE (return on equity) peers,” the brokerage said. Therefore, ICICI Direct has set a target of Rs 800 on this stock, 22 percent more than its closing price on March 21.
JM Financial said that its order book till FY18-21 registered a CAGR of 41 per cent and its sales grew by 2.2 times to Rs 490 crore. With this, it can see strong growth in the form of 18 percent CAGR in the next 3 years.
JM Financial has a buy call on this stock with a target of Rs 800. They feel that it can see an increase of 18 percent from its March 21 closing price.
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Axis Securities has given a buy rating on Cipla and has set a target of Rs 1200. He says that from its closing price of March 21, 14 percent more upside can be seen in it.
Cipla continues to focus on complex products with chronic and acute therapies for its branded and generic markets in India and South Africa.
Centrum Broking has rated ‘Buy’ on Aditya Birla Capital and has a target of Rs 150 (with a potential increase of 39 per cent from March 21 closing price) with a stop loss. They believe that it provides a good option in the diversified financial space.
The brokerage said the asset management company could benefit majorly from the expansion of AMC as it is the fourth largest company with a strong debt franchise.
The share of Aditya Birla Housing Finance (ABHFL) saw a rise in FY 20-22 as the share of affordable segment increased from 14 per cent to 35 per cent, due to which NIM rose from 3.1 per cent to 3.9 per cent.
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KPIT Technologies is a consulting and software integration company providing services and solutions to over 150 companies and enterprises in the area of CASE (Connected – Autonomous – Shared and Electric) mobility.
Geojit Research has delivered 45x FY24E EPS value to KPIT given the strong fundamentals and strategic changes adopted in the company’s segment mix. The brokerage has given ‘Buy’ rating on the stock with a target of Rs 680. This target indicates an upside of 15 percent from its March 21 closing price.
Brokerages expect Star Health, Data Patterns, Cipla, Aditya Birla Capital and KPIT Technologies to rise 14-39 per cent from their March 21 closing prices
(Disclaimer: The views and investment advice given on moneycontrol.com are the personal views and opinions of investment experts. Moneycontrol advises users to consult a certified expert before making any investment decision.)
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