Muhurat Trading 2021: Samvat 2077 started with a robust bull run led by outperformance in the broader market after a muted performance seen in the calendar year 2018 and 2019. While benchmark Nifty has delivered a stellar return of more than 40% since the last Diwali, Mid and Small Cap Indices, too, have reported excellent performance and are up 66% and 79%, respectively, for the same period.
SAMVAT 2077 returns were broad-based primarily on account of better participation witnessed across stock categories and sectors that were relatively narrow in the pre-pandemic years.
All sectors delivered positive returns, with top gainers being Metals (+128% YoY), Realty (+113%), and PSU Banks (+93%). On the other hand, Pharma (+23%), FMCG (+29%), and Private Banks (+30%) were underperformers as defensives took a breather.
The theme of Samvat 2077 was high beta, cyclicals, and value. FII flows in equities were the highest ever at Rs 1.6 lakh crore, while DII saw outflows after five consecutive years of inflows.
7 Reasons Why Bullrun Will Continue:
i. GST collection has consistently exceeded 1.2 lakh crore in the last six months, and revenue collection appears stable for the government.
ii. With Covid-19 in the background and over 100 billion doses of Covid vaccinations administered, the focus would shift to growing industries.
iii. With record-smashing vaccination, dropped COVID19 cases, businesses resuming back, India is all set to unlock and ride the wave of economic growth.
iv. India has emerged as the fastest-growing major economies globally and is expected to be one of the top three economies in the world over the next 10-15 years.
v. The Reserve Bank of India's Monetary Policy Committee (MPC) kept its 9.5% GDP prediction for FY22 but upped its 3Q GDP estimates from 6.3% to 6.8%.
vi. The RBI Governor remarked that economic impulses have strengthened in the recent two months based on rising high-frequency indicators.
vii. Exports have emerged as a growth engine, with India reporting the highest ever export in a single quarter in 2QFY22.
viii. The country witnessed the third consecutive year of normal monsoon, which is also likely to aid rural demand.
"We believe that companies with a robust business model, strong moat, and a resilient balance sheet will help the portfolio tide over the impending volatility which the hike in the interest rates could expect. Investment cycles drive sustained economic growth and the improving outlook on income would encourage household investment spending," said IIFL Securities in a note to its clients.
For Samvat 2078, leading brokerage houses using technical charts have identified a few stocks for you that can outperform the markets. These stocks are selected from different sectors and from fundamentally sound companies, which may help you to diversify your investments.
Axis Securities suggest buying and accumulating the stocks for SAMVAT 2078 in the mentioned range for a potential upside of 20% - 30%. They include:
Company Name Upside potential
KEC International (27%)
United Spirits (25%)
Kolte Patil Developers (32%)
State Bank of India (26%)
Ashoke Layland (30%)
Minda Corporation (37%)
Bharti Airtel (25%)
ACC Ltd. (19%)
TCS Limited (21%)
SBI Cards Limited (24%)
Grasim Industries (21%)
Market Guru Sanjiv Bhasin had recommendations for a Multibagger Portfolio during Diwali 2021 includes the following.
Large Cap:
Name Potential Returns
ICICI Bank 16%`
Infosys 22%
Tata Motors 27%
HDFC Bank 25%
Larsen & Toubro 21%
Tata Steel 48%
Mid Cap:
Name Potential Returns
Tube Investments of India 12%
Deepak Nitrate 30%
SW Solar 82%
RSWM 83%
Shriram Transport Finance 23%
Persistent Systems 22%
Tata Chemicals 28%
For Samvat 2078, Motilal Securities has the following recommendations.
Earnings Normalisers: With an improving economy, certain pockets of the large caps are well poised to show a sharp improvement in earnings. (SBI and Tata Motors)
Travel & Tourism: With India crossing 100 crore vaccination and opening up of various sectors, we expect the Leisure segment to do very well over the next 6-12 months. (United Spirits, Indian Hotels, VIP)
Real Estate & ancillary: We believe real estate is on the cusp of an upcycle with several macro factors supporting low-interest rates, benign prices, and rising affordability coupled with low homeownership in India. (Ultratech, Macrotech)
Long-term Compounders: The pandemic has provided long-term growth drivers for certain sectors like increased spending on technology and change in consumer behavior for QSR, providing them with long-term growth visibility. (Infosys, SBI Life, Jubilant Foods)
Mid-caps: Stock selection was the key in generating returns within the Midcap space – a trend that we believe could continue going ahead as well. (Tata Power, Varun Beverages, Trident, APL Apollo, Orient Electric)
IIFL believes what can derail this stack of assumptions is if supply bottlenecks turn out to be so persistent that growth is obstructed and inflation becomes entrenched, thus creating stagflation. "But, we believe the chances are that this would be resolved over the next year," said the note.
[Disclaimer: The views and investment tips expressed by experts on ABP Live are their own and not those of the website or its management. Readers are advised to consult with experts before taking any investment decisions.]