Nifty 50 may hit 25,810 by December, says Prabhudas, picks 7 large cap stocks (2024)

Capital goods, infrastructure, real estate, EMS, logistics/ports, hospitals, tourism, auto, new energy, e-commerce, and telecom are considered by the brokerage to be powerful themes to explore.

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Seven large-cap counters have been chosen by Prabhudas Lilladher as their top picks: Siemens, Reliance Industries (RIL), Max Healthcare Institute, HDFC Bank, ICICI Bank, and Larsen & Toubro (L&T).

According to the brokerage, it reduced its overweight on banks from 220bps to 80bps. It predicts that banks will expand slowly in FY25, that NIM and asset quality are unaffected by these levels, and that a gradual decline in HDFC Bank's LDR might offer significant upside over the following 12 to 15 months. The brokerage is somewhat adjusting the weights of SBI and ICICI Bank, but remain overweight on both names.

The brokerage said that because of improved prospects for O&G capital expenditure, electricity, infrastructure, and less loss in the Hyderabad Metro project, it is increasing its allocation to L&T by 40 basis points. Prabhudas Lilladher has boosted their overweight position in capital goods to 610 basis points, driven by robust growth prospects over the next 3-5 years.

In addition, Prabhudas Lilladher is shifting tooverweight positionon RIL after having generally maintained an underweight stance for oil & gas sector. It believes that the company's next stage of development will be driven by its sustained growth in retail and possible forays into new energy-related industries. It also anticipates possible demergers, like the one with Jio Finance, which may enable shareholder value from earlier endeavors.

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Nifty 50 Outlook

In a webinar today, Amnish Aggarwal, Head of Institutional Research at Prabhudas Lilladher, explained that the Nifty 50 recently hit an all-time high, but that it then underwent a correction of about 4% due to rising geopolitical tensions, changes in the price of crude oil and other commodities, and divergent views on the US Federal Reserve's expected interest rate changes. At the same time, India is in the midst of the General Elections, which are a significant event this decade. The markets are not prepared for a recurrence of the 2004 election outcome, in which the BSE Sensex fell 15.5% on May 17, 2004, the day the election results were declared, despite opinion polls predicting an easy victory for the NDA.

As to the brokerage, the beginning of June marks a pivotal moment since it will signal the end of political volatility and monsoon season uncertainties, potentially leading to a notable surge in foreign institutional investor (FII) inflows.

“We increase our base case Nifty 50 target to 25,810 (25,363 earlier). We advise buying during market dips in run upto June 4," the brokerage advised.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 25 Apr 2024, 05:37 PM IST