90% of the market overvalued except very largecap stocks: Sanjeev Prasad

“I will be a buyer at the current market price on every dip. FIIs are now still short in the market. They are yet to cover their short and they will start covering. DIIs will continue buying this market and if FIIs start buying this market and crude further comes down $10 from here, bond yield topping, interest rates topping, this market has a lot of legs to go on.”

In a financial year where the number of stocks gained is much larger than stocks that end in red, there are some surprises in the list of stocks that have ended FY 24 in red. Surprise because of two reasons. First, these are all largecap stocks where fundamentals are surely not in doubt. They have consistently seen earnings inching upward. Yes, one can have a debate about the rate of growth at which earnings have been less than satisfactory. But then they have grown, except in 3 cases, where one can argue that earnings are just refusing to move up. The second surprise is that some of them have created great wealth over the long term. So, if they have not been able to gain in one year should one ignore them. The list is filled with major surprises, a company that is amongst the top ten stocks in terms of market capitalization in the Indian stock market. History has shown that in the stock market, if the fundamentals of a company are fine, then sooner or later they make a comeback.

The capital good midcaps are playing out. A little bit of caution there, stay with the big one, Siemens, Bharat Forge, if you can term that as a capital good. Siemens, Bharat Forge, L&T, Thermax and ABB, are some of our preferred picks which are in our portfolio as a disclosure. We are not going overweight on them, we are staying put but like we said, these are the themes and that is why one can see that green shoots emerging on the capex side after 20 years .

For the new calendar year 2024, the brokerage firm has picked 9 stocks within the broader themes of manufacturing, PSU banks, NBFCs, IT services, and consumption. The nine stocks recommended by Axis are Pitti Engineering, Sansera Engineering, Archean Chemicals, Amber Enterprises, JK Lakshmi Cement, SBI, Manappuram Finance, Cyient, and Westlife Foodworld.

“Booking part profit is always a process but where do you deploy the cash because views of experts keep moderating. But staying put is the only mantra in India. This is the beginning of a big bull market, and you are there for the next 20-30 years. The financialisation of savings, the backbone of the market being the retail investor is not churning. ”

The market capitalisation of all BSE-listed stocks rose by Rs 81.3 lakh crore to Rs 363.67 lakh crore. Having crossed the $4 trillion m-cap milestone, India looks poised to take over Hong Kong and become the fourth-largest equity market in the world.

Among other stocks, defence PSU stock Mazagon Dock Shipbuilders has rallied around 180% during the year amid government's increasing thrust on domestic manufacturing and defence spending.

Pankaj Pandey says: “Power as a space is looking quite good for the next five-seven year perspective and our sense is that the government focus will come back once the elections are out. So a lot of triggers are in placer for this sector to keep doing well. NTPC has already achieved a target price post result we will look at reviewing our target prices but NTPC remains top pick.”

Sanjiv Bhasin, Director at IIFL Securities, is bullish on three stocks: Reliance, AU Bank, and Tata Power. He believes that if the market is to reach 20,000, Reliance must rise above Rs 2,600. Bhasin also highlights the strong performance of AU Bank and the potential of Tata Power in the green energy sector. In addition, Bhasin suggests that the current market fear could be a good entry point for Adani Ports, as CLSA believes the recent drop in stock price is only a minor setback.

Having rallied around 10% in the last 3 months, both Sensex and Nifty are now playing hide and seek with their lifetime high levels as hopes of pivot by central banks are being countered by a tough global macro environment.