Recent macroeconomic pressures and rising global borrowing costs have lowered the Nifty's one-year forward earnings multiple to 16.4x, down from its long-term average of 18.4x. This broad downturn also reduced India’s valuation premium over emerging markets from 97% to 35%, prompting SMIFS to issue high-conviction buy calls. TVS Supply Chain Solutions and Swiggy lead the brokerage's selections with projected gains exceeding 100%. The curated portfolio also features established industry heavyweights including Mazagon Dock Shipbuilders, Olectra Greentech, ITC, and Larsen & Toubro.
Key points
Market corrections have moderated the Nifty forward earnings multiple to attractive level…: Market corrections have moderated the Nifty forward earnings multiple to attractive levels below long-term historical averages.
Target prices for Mazagon Dock Shipbuilders and Olectra Greentech reflect substantial ups…: Target prices for Mazagon Dock Shipbuilders and Olectra Greentech reflect substantial upside potentials of 68% and 52% respectively.
Established corporate giants ITC and Larsen & Toubro provide steady upside projections of…: Established corporate giants ITC and Larsen & Toubro provide steady upside projections of 39% and 20% to round out the portfolio.
Sources checked by our analysis pipeline: 1
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:
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2/7
ITC Ltd.
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.
Agencies
3/7
Larsen & Toubro Ltd.
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.
ETMarkets.com
4/7
Mazagon Dock Shipbuilders Ltd.
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.
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