However, towards the second half, factors such as an improving macro environment, moderating commodity prices and inflation, steady interest rates as well as the state election outcome encouraged market participants.
Healthy inflow from domestic institutional investors (DII) and foreign institutional investors (FII) brought back confidence in the market. Consequently, the key domestic benchmarks Sensex and Nifty 50 continued reaching multiple records and gained nearly 20-22 per cent in the last one year.
‘’We are entering the year of 2024, with the index at record high, along with optimistic sentiments such as moderating inflation, steady interest rates, economic growth picking up as well as healthy inflow from FII & DII continues to be the net buyers, keeping the sentiments positive for the Indian markets,” said Religare Broking.
The brokerage added that there is high anticipation that the Indian economy will continue to emerge as the fastest growing economies as compared to others because of its resilient performance in the past as compared to global challenges, steady policy action, robust demand environment and continuous investment towards infrastructure and boosting economic growth.
Also Read: Year 2023 | From $82 to near $100 and back: How Brent crude moved in 2023 over OPEC+ cuts and more
‘’Meanwhile, we expect domestic markets to be highly volatile so investors as well as participants are advised to keep their focus on specific sectors and stocks into mid to large-cap space,” said the brokerage.
In the current market scenario, Religare Broking has released its top five New Year stock picks for 2024. The brokerage has selected quality stocks on technical as well as fundamental parameters.
New Year Stock Picks for 2024 by Religare Broking:
Let’s take a look at the top five technical and fundamental stocks for New Year by brokerage Religare Broking:
1.Kotak Mahindra Bank: Target: ₹2,060-2,180; Current market price (CMP): ₹1,902
In a stable interest rate environment, the brokerage expects the banks topline and margin to improve along with its deposit growth which has remained strong as compared to the industry led by the floating rate saving account and term deposits.
Going forward, the bank remains focused on technological advancement to improve customer experience and cost efficiencies as well as expect it to continue maintaining industry best asset quality, according to Religare Broking.
Technical Outlook: Kotak Bank has been trading in a broader consolidation range i.e. 1,650-2,000 for over two years and currently seeing recovery after retesting the lower band of that range.
The existence of long term moving average i.e. 200 WEMA around the lower band is added positive. ‘’The chart structure combined with buoyancy in the banking space is pointing toward a steady rise and possibly the end of the consolidation phase also,” said the brokerage.
2.Asian Paints: Target: ₹3,590-3,900; CMP: ₹3,404
Despite the competition from new entrants, Asian paints has been able to maintain its market leadership as well as enjoys premium valuation led on the back of its product portfolio, strong presence in decorative space and its foray into allied segments as well as healthy distribution reach.
‘’We believe industry tailwinds such as government spending towards infra structure and housing and demand from real-estate along with robust festive demand and marriage season will aid growth,” said Religare Broking.
Technical Outlook: ‘’It has been witnessing consolidation in a broader consolidation i.e. 2550-3570 for over two years, forming higher lows on the weekly timeframe. It is inching gradually towards the upper band of the range and likely to surpass the same in its third attempt,” said the brokerage.
3.Eicher Motors: Target: ₹4,550-4,800; CMP: ₹4,120
With the industry witnessing gradual shift towards 125+cc category of motorcycles, Eicher will be a direct beneficiary of such a trend. In line with the growing electric vehicle (EV) demand, Eicher will leverage its Stark Future investment with is aimed to accommodate the EV demand in the commercial vehicle segment, according to Religare Broking.
The company has been able to withstand steep competition from its peers in its core segment mainly due to the demand for the premium motorcycles segment which has resulted with overall year-to-date (YTD) volume growth of ~13.4 per cent.
Technical Outlook: ‘’We are seeing noticeable traction in the auto space and Eicher Motor is trading largely in tandem with the trend. It has reclaimed the record high after spending nearly over a year in a corrective phase,” said the brokerage.
‘’It is currently hovering in a narrow range around its record high, forming a base around its previous breakout zone. This consolidation is a fresh buying opportunity for those who missed the chance earlier,” it added.
4.United Spirits: Target: ₹1,210-1,325; CMP: ₹1,083
The softening of input cost has enabled the company to post healthy margins in the recent quarters. It intends to achieve ~15 per cent EBITDA margin in the medium term while aiming at ~16 -16.5 per cent in the long term.
‘’It is virtually a debt free company and has started distributing dividends to its shareholders while it also maintains healthy return ratios making it an attractive proposition in its segment, according to Religare Broking.
Technical Outlook: MCDOWELL-N registered a decisive breakout from the consolidation phase in July 2023, which continued for over one and a half years.
It has been gradually inching higher since then, finding support at its short term moving average i.e. 20 WEMA. ‘’Following price action and positioning of the momentum indicator, we expect the stock to maintain the prevailing tone. Traders can accumulate in the mentioned range,” said the brokerage.
5. Mphasis: Target: ₹2,900-3,350; CMP: ₹2,740
Mphasis earns a major portion of revenue from the American region (~81 per cent) and Banking sector (53 per cent). Given the marco-economic challenges in the American region and slow start to the banking sector this fiscal, the management focus remains on acquiring deals from other geographies like Europe & Middle East as well as sectors such as technology, telecom and Insurance.
There is healthy demand for artificial intelligence, cloud and transformation deals, strong order pipeline which is yet to get converted to revenue and also are investing behind technology. All this is playing well for the company and has maintained their EBIT margin guidance band of 15.25-16.25 per cent for FY24, according to Religare Broking.
Technical Outlook: ‘’Mphasis has recently ended the two-year-long corrective phase, with a breakout from a bullish Cup and Handle price pattern. Post the initial surge, it is forming a fresh buying pivot around the support area of previous swing high. Its chart pattern combined with recent buoyancy in the IT space is suggesting buying interest at the elevated levels,” said the brokerage.
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 taking any investment decisions.
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Published: 28 Dec 2023, 09:43 PM IST