Mumbai: Rich valuations have been a concern for stock investors, but analysts say there is still steam in various pockets of the market. In the NSE500 index, 180 stocks could return between 10% and 50% over the next 12 months, according to Bloomberg consensus estimates of companies covered by at least five analysts. These include SAIL, NCC, Kalpataru Power, Jindal Steel, Tata Steel, NMDC, Aurobindo Pharma, UPL, Mahanagar Gas, and Gujarat State Petronet, among others.

“Valuation comfort is still left in some pockets that should drive economic recovery,” said Vinod Karki, equity strategist, ICICI Securities. “Consensus fundamental price targets indicate that the cyclical, capital-intensive defensive space – commodities, financials, utilities, healthcare, automotive, media, select materials and telecommunications has upside potential despite valuations maximum. ”

Steel stocks – SAIL, Jindal Steel and Tata Steel – could return 40%, 32% and 31%, respectively, from current levels, according to estimates. Investors recently reduced their exposure to the sector over fears of slowing demand from China’s real estate sector amid the crisis at Evergrande, China’s second-largest real estate developer. Some analysts have said concerns about pressure steel prices are overblown.

“With no significant additional supply from the United States and Europe over the next year and increased costs due to rising energy prices and decarbonization, global prices for gasoline ‘Steel will remain high compared to the historical average and Indian producers are in a better position with a relatively lower risk of a sharp decline in steel prices, ”said Ashish Kejriwal, analyst at Centrum Broking.


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