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3 Bluechip Nifty Stocks To Buy That Have Fallen 30% From Highs

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It's probably the best time to invest, if you are looking at value in the markets. The Sensex has fallen below the 53,000 points mark, something we have not seen in a long-time. Here are 3 Nifty stocks that you could buy now, that have fallen 30% from highs.

 

Wipro

Wipro

Current market price52-week highFall %
468739-36.67

The fall in the share price of Wipro has been -36.67%, which is probably the highest for any Nifty company. The problem for Wipro has all along been the fact that growth has been tepid. For the quarter ending March 31, 2022, the company saw a small increase of 4% consolidated profit to Rs 3,092.5 crore in the fourth quarter. Investors have over the years shifted their strategy to growth oriented stocks from value stocks. So, even if there is loss in a company, investors are willing to pay a premium and buy the shares of such a loss making company. Wipro, at the current market price is more of a stock where there is tremendous value. Wipro's new strategy and investments are progressing well - 60 synergy deals with Capco and 30% YoY growth in cloud ecosystem in FY22 are positives. Wipro has made addition of eight customers in more than $100 Mn bucket on YoY basis. Net Income for the year was highest ever at $1.6 Bn and delivered robust growth in EPS of 17.0% YoY. Buy the stock of Wipro if you are looking at decent gains and regular dividends, with a reasonable p/e multiple.

Housing Development Finance Corporation
 

Housing Development Finance Corporation

Current market price52-week highFall %
21313021-29.46%

This stock is an absolute bluechip and has always been an out performer over the 3 to 4 decades. The reasons for the fall in HDFC is not very fundamental. In fact, the stock was heavily owned by Foreign Portfolio Investors, more popularly known as FIIs and these are now dumping the stock and exiting the Indian markets as interest rates in the US rise. This along with subsidiary HDFC Bank have fallen sharply. The company is the promoter of HDFC Bank, HDFC Life, HDFC Asset Management and owns significant shares in these companies. The value of the company's holdings in these companies runs into several thousand crores. In fact, the core business of HDFC, if you take Rs 1000 as the valuation for shares in subsidiaries is barely getting any discounting. The company recently announced a merger with HDFC Bank, which should take a year or so to fructify. The shares of HDFC are a good buy as the merger with HDFC Bank, should create value for both the entities.

HDFC Life Insurance

HDFC Life Insurance

Current market price52-week highFall %
779549-30%

Life insurance stocks have seen some serious selling pressure in their stocks, including names like ICICI Prudential and SBI Life. The stock of HDFC Life has fallen 30% from 52-week highs of Rs 779. KR Choksey had a buy call on the stock. It assigned a 3.25x P/EV on FY24E EVPS of Rs 227 and a VNB multiple of 26x to HDFC Life and revising the weighted average Target Price at Rs 706 per share (previously Rs 790 per share) (50:50 weights on the P/EV and appraisal value methodology), implying a 28.6% upside potential over the current market price of Rs 549. Most brokerage firms that have analyzed the stock have a target in the range of around Rs 700 or so. Given the sharp fall it makes sense to buy into the shares of HDFC Life Insurance at the current levels.

Right strategy to adopt while buying shares

Right strategy to adopt while buying shares

If you are buying into shares right now, one of the strategies to adopt would be to buy in small quantities as the markets are exceedingly volatile. The best route to buy stocks would be to buy small through SIPs, where like mutual funds, you deploy small amounts each month. One of the reasons for advising the same, is because the Nifty has fallen 15% from peaks and investing lumpsum amounts could be risky. Also, only if you plan to hold your share for a period of 5 to 7 years, it would be a good idea to by shares now. Overall, it would be hard to say where the bottom lies and that is one of the reasons we are advising caution to small investors.

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