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After an oscillating Samvat 2076, most broking houses expect the New Hindu year that begins on Saturday will be less volatile and could form the foundation for the next multi-year bull cycle. Most brokerages also expect large caps to outperform mid and small-caps in the coming year and ask investors to be stock-specific for better returns.
According to Prabhudas Lilladher, the recovery has been led by sharp upsurge in rural demand as benefits of higher crop prices as normal monsoons benefit 60 per cent of population. “We remain positive and believe that the current uptick could be the start of next multi-year cycle.”
Dinesh Thakkar, Angel Broking, said: “Looking at the current environment I am confident that the worst is behind us and we can look forward to a better and brighter Diwali next year.”
Angel Broking sees continued momentum in cyclical sectors such as auto and cement while it also expects sectors with strong revenue visibility like agrochemicals, IT and pharmaceuticals will continue to do well.
According to Kotak Securities, “As we advance towards getting the vaccine (by middle of next year) and economy gets back to normalcy, we can expect the economy driven sectors to outperform the defensives in Samvat 2077”.
Banks, NBFCs, automobiles, oil & gas, telecom, utilities, capital goods, cement and metals could come into focus in Samvat 2077. “The potential upside in most of these sectors based on our one year price targets ranges between 20 & 39 per cent (vs single digit potential upside in Nifty-50),” it added.
For Axis Securities, Samvat 2077 now looks much brighter and this Diwali has brought festive cheers to many, “but still, there is a long way to go”. It seems more likely that growth may come back strongly looking at the high-frequency indicators.
YES Securities: The sharp recovery in the ongoing Q2 FY21 results is nothing short of impressive. “While many businesses have grown on a year-on-year basis, many others are only 10-20 per cent below pre-Covid levels,” it added.
Still in Covid worry
However, HDFC Securities, said, India still is not out of woods as far as the Covid pandemic is concerned – though latest macro and micro data are encouraging.
In the new Samvat, investors need to look at asset class diversification, sector diversification, spreading investments over time (by way of SIP or staggered investments). Also going by the way Global investing has picked up pace, MNIs and HNIs need to look at this asset class to check whether this suits their risk profile and skillsets.
“All in all after a turbulent past year, we can look forward to a relatively sedate but selectively rewarding year,” it added.
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