Prabhudas Lilladher sees Nifty at 22,584 in 12 months; lists top stock picks for model portfolio
Nifty has been flattish in the past 6 weeks and gave just a 1.6 percent return in the past one quarter on the back of multiple headwinds. Moreover, strong DII flows have also been neutralized by FII outflows. Still, the market has taken all headwinds in its stride and the action has been very stock-specific as Mid/small caps continue to outperform large caps, a report by domestic brokerage house Prabhudas Lilladher stated.
Sectoral rotation is clearly visible as Realty, Metals, Power and Healthcare have joined the party, noted the brokerage. "Festival season has seen high single-digit growth in sales of 2W/PV, 40-50 percent growth for online platforms, robust sales of Jewellery (despite high prices) and economic boost coming from cricket world cup (Alas, Bharat could win the title). However, demand trends in December are critical as FY23 had seen a sharp deterioration in demand post-Diwali.
Capex recovery is on track with a strong performance from Capital Goods/ Infra segments and a strong outlook while bank balance sheets remain healthy. Odds are evenly balanced as headwinds emanating from firm US interest rates, El Nino impact on crops and inflation, volatile crude and geopolitical uncertainty still abound. NIFTY is not in a bubble zone as it is trading at a 17.2 percent discount to the 10-year average which provides comfort," PL pointed out.
Furthermore, India is on the verge of “Mother of all Elections" after having a stable Govt for the past decade, however state election results will dictate market momentum in run upto Lok Sabha elections next year, it added. Amid this backdrop, the brokerage remains positive on Auto (PV), Banks, Capital goods, Hospitals, Discretionary and consumption. Also, in Q2, PL coverage
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