9 Top Mid And Small Cap Stock Ideas From The “Bulls & Bears” Report

The Bulls and Bears, India Valuations Handbook by Motilal Oswal has listed some stock ideas from the small and midcap space. Here are 9 stock ideas from the space. Before that let us see what the bulls and bears report says.

Positive triggers for the market

According to the Bulls & Bears report, stock markets in CY22 have been highly volatile and jittery fuelled by a multitude of global and domestic macro headwinds. "However, despite these challenges, the Indian markets have shown remarkable resilience and outperformed the global markets significantly. Positive triggers: Deceleration in the pace of inflation and any resolution in the Russia-Ukraine conflict can provide a relief, thus allaying the pressure on central banks to raise rates further," the brokerage has said.

Negative triggers for the markets

According to the report, the negative triggers for the markets are India's economic growth which is likely to moderate in 2HFY23 - the RBI is projecting a GDP growth of 4.3%. This may have an adverse implication on demand and in-turn, the corporate earnings. Notably over the last three years, strong corporate earnings trend has been the most important driver of India's out performance.

DII Flows at record highs

DII flows into equities in CY22 were the highest ever at USD32.2b v/s inflows of USD 12.1 billion in CY21. With just one year of outflows since CY16, DIIs have invested USD80.5b cumulatively over the last seven years. Conversely, FIIs witnessed equity outflows of USD17b after three consecutive years of inflows. During the last seven years, FIIs have invested USD30.4b cumulatively in the Indian market, with only two years of outflows.

Top ideas from the midcap and small cap space

According to Motilal Oswal the top stock ideas from the small and midcap space include names like Varun Beverages, Ashok Leyland, Jubilant FoodWorks, IDFC First Bank, Vinati Organics, Metro Brands, Angel One, Computer Age Management Services, and Lemon Tree Hotels.

Meanwhile, according to Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, while markets could remain sideways in near term, they expect buying emerging at lower levels. "18,000 mark can act as strong support zone and recovery might be seen once the event is over. IT sector is likely to see some action ahead Q3 results next week.

Some of the banks have announced strong pre-quarterly business updates indicating good results ahead, which could keep the sector in limelight. Other sectors like insurance, fertilizer, capital goods and agri related stocks can see some momentum in anticipation of development in upcoming budget," he states.