Indian stock market traded higher on Tuesday, with the frontline indices Sensex and Nifty 50 tad below their record high levels. The gains were led by banking, financial services and IT stocks.
Foreign Investors are optimistic on Indian markets from a medium-term perspective but are cautious after the surprisingly strong post-election rally, according to analysts at Emkay Global Financial Services.
Industrials is the favorite sector but there is some traction in Autos and Banks. Staples attract the least interest, and there is some momentum in Technology names, the brokerage firm said.
It sees little near-term upside in Nifty from the current levels because of elevated valuations and lack of positive catalysts.
“This is, however, a pause in a multi-year bull run, and we see very little chance of a meaningful correction. We are constructive on the manufacturing / investment cycle and prefer playing it through Durables (Auto) and Materials. However, we also see counter-intuitive opportunities in FMCG and Tech on relative valuations and earnings recovery. Industrials and Financials are better played through select SMIDs, in our view,” said Seshadri Sen, Head Of Research And Strategist at Emkay Global Financial Services.
Among stocks to buy, the brokerage firm’s top smallcap and midcap stock picks are Jubilant FoodWorks, Honasa Consumer, Suprajit Engineering, Senco Gold and Metropolis Healthcare.
Emkay Global has an ‘Add’ rating on Jubilant FoodWorks with a target price of ₹525 apiece. It expects the company to deliver earnings per share (EPS) growth of 41.6% YoY in FY25 and 29% in FY26.
Honasa Consumer is a personal care and products company with its flagshop brand Mamaearth. Emkay has a ‘Buy’ call on Honasa Consumer shares with a target price of ₹525 apiece. It expects EPS growth of 43% in FY25.
The brokerage firm has a ‘Buy’ rating on Suprajit Engineering shares and a target price of ₹610 per share. The company is estimated to see EPS growth of 50.7% in FY25.
Emkay Global has a ‘Buy’ call and Senco Gold share price target of ₹1,100 apiece.
Metropolis Healthcare shares have been rated ‘Buy’ with a target price of ₹2,200 per share.
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.
Disclosure: The promoters of HT Media Ltd, which publishes Mint, and Jubilant FoodWorks are closely related. There are, however, no promoter cross-holdings.
