The Nifty has declined as geopolitical tensions, elevated energy prices, persistent foreign selling and higher global borrowing costs have weighed on sentiment. However, the correction has improved the balance between valuations and earnings prospects. The Nifty trades at 16.4x one-year forward earnings against its long-term average of 18.4x, while India’s valuation premium to emerging markets has moderated from 97% to 35%. Here are 6 stocks domestic brokerage SMIFS is bullish on:
ITC Ltd. has a target price of Rs 360 against its current market price (CMP) of Rs 259, indicating an upside potential of 39%. The stock carries a BUY recommendation.
Larsen & Toubro has a target price of Rs 4,550 compared with its CMP of Rs 3,801, translating into an upside potential of 20%. The recommendation is BUY.
Mazagon Dock Shipbuilders has a target price of Rs 2,905 against its CMP of Rs 1,731, indicating an upside potential of 68%. The stock has a BUY recommendation.
Olectra Greentech has a target price of Rs 1,500 compared with its CMP of Rs 985, suggesting an upside potential of 52%. The recommendation on the stock is BUY.