Nifty on the new Covid variant worries collapsed last week by a great deal and in trade on November 30, 2021 is currently almost 8.5% percent down from its peak level of 18,604 scaled on October 19, 2021. Already the markets world over have been factoring an earlier than expected rate hike by the US Federal Reserve amid spiking inflationary levels.
"Due to the various global factors (Fed's taper announcement, rising bond yields, higher crude oil prices, and strengthening of the US Dollar Index) and detection of a new COVID-19 variant - Omicron - in South Africa, Nifty has toppled sharply. A big fundraise in the primary market also put some pressure on the secondary market. Sentiments were battered globally, with global markets correcting by 2-3%, bond yields easing, and Brent Crude prices plunging by 11%. India's VIX rallied 25% to 20.8.
Since these are early days for the new variant, limited information regarding its transmission and impact is available. We expect the Centre/ state governments to remain proactive, given their experience from the second COVID wave in Apr-May'21, and guidelines to evolve as the trajectory of the new variant becomes clearer. We expect the market to witness elevated volatility in the near term. However, valuations after the pullback, are relatively reasonable now at 23.3x/19.5x FY22E/FY23E Nifty EPS. Hence we would advise investors to buy into this correction. advise investors to buy into this correction", says Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
Likewise, different brokerages have come up with 'Buy' recommendations from different sector for considerable gains in a 1-year period:
Jefferies has a 'Buy' on the scrip of UPL for a 1-year target price of Rs. 945. The 'Buy' has been retained given the various triggers including focus on margin accretive differentiated solutions, robust pricing, launch of new platforms and ESG could underpin its future growth.
2. IPCA Lab:
Motilal Oswal has a 'Buy' call on the pharma scrip for a 1-year price target of Rs. 2600. The brokerage is bullish on the counter given superior execution in branded generics exports, capacity expansion in API and better traction in the institutional anti-malarial segment.
3. PNC Infratech:
This construction and contracting real estate entity has been given a 'Buy' call by Geojit for a price target of Rs. 370 to be realised in 1-year. The buy on the stock has been reiterated given the strong order book and a healthy balance sheet. The company's Q2 revenue that scaled 53 percent YoY in the second quarter has been better than the estimates.
Emkay has given a buy on the tractor major for a target price of Rs. 2140 in the 1 year horizon. The stock has been upgraded to a 'Buy' as Kubota's takeover would substantially improve the company's medium term growth outlook; via technology support and using Escorts for meeting Kubota's global component needs.
5. Dixon Technologies:
The electricals firm has been again upgraded to a 'Buy' by Anand Rathi for a 1-year price target of Rs. 5936. After becoming strong in Indian contract manufacturing, Dixon has global aspirations and is now targeting the global LED bulb market.
6. Blue Dart Express:
Nirmal Bang has maintained its buy call on the couriers company for a price target of Rs. 7776 apiece. As per the brokerage, the company's market share has gained despite premium pricing by as much as 25% in comparison to peers owing to unbeatable record in safety and reliability.
|Stock||Brokerage firm||1-year target price||Last traded price as on November 30, 2021||Potential upside|
|Bluedart Express||Nirmal Bang||7776||6737||15.00%|
The above stocks from different sectors are recommended by different brokerages for potential gains. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.