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Business Standard
2 days ago
- Business
- Business Standard
Sensex dips 800 pts, Nifty below 24,600 as latest tariff hikes jolt markets
Why stock markets fell today: Indian benchmark indices plunged after the opening bells, taking cues from a decline in their Asian peers amid fresh tariffs from the US. The BSE Sensex index plunged 796 points or 0.98 per cent in the intraday trade to hit a low of 80,654 during the day. The NSE Nifty50 fell 224 points, or 0.91 per cent, to 24,526. The indices registered their worst fall since May 27 this year. The broader market indices continued to outperform the benchmarks. The Nifty MidCap was 0.08 per cent up while the Nifty SmallCap index was 0.01 per cent lower, respectively. Except for Nifty Realty, fast-moving consumer goods (FMCG) and PSU Banks, all sectors were trading lower on Monday, led by information technology (IT) and metal. Furthermore, the market breadth remained skewed in favour of sellers. About 1,336 stocks rose, 1,779 declined, while 187 remained unchanged on the BSE. The market structure favours the continuation of the ongoing consolidation phase and global headwinds like renewed tariff concerns that will restrain a breakout rally, according to VK Vijayakumar, Chief Investment Strategist, Geojit Investments. Key reasons behind the Sensex, Nifty fall today: Asian markets decline: Most equity benchmarks in Asia traded lower on Monday as trade tensions flared up over the weekend, with US President Donald Trump announcing additional tariffs on steel and aluminium to 50 per cent from 25 per cent. Later, the European Commission said on Saturday that Europe was prepared to retaliate against President Donald Trump's plan to double tariffs on imported steel and aluminium. In Asia, Japan's Nikkei was down 1.5 per cent while Hang Seng plunged over 2 per cent on Monday. All major equity benchmarks were in red with South Korea and Australia's index down 0.5 per cent. S&P 500 futures eased 0.2 per cent and Nasdaq futures lost 0.3 per cent. President Trump's 50 per cent tariffs on steel and aluminium are a clear message that the tariff and trade scenario will continue to be uncertain and turbulent, Vijayakumar said, impacting markets on Monday. Stock market volatility continues as China has now accused the US of violating its recent trade deal and stated that it will take measures to defend its interests. However, Treasury Secretary Scott Bessent said he's confident the latest trade clash between Trump and Xi Jinping 'will be ironed out' in a call shortly. IT, Metal stocks plunge: The losses in the domestic markets were led by IT and metal stocks as the latest trade tensions keep investors on edge. The tech stocks fell on Monday as tariff threats continue to weigh on the US economy. The gauge for tech stocks -- Nifty IT -- fell as much as 1.5 per cent during the session, with Mphasis, Persistent Systems and HCL Technologies leading the decline. Meanwhile, in the metal space, Welspun Corp, Vedanta and JSW Steel were among the top losers as Trump's steel and aluminium will become June 4, Wednesday. The Nifty Metal index was the top sectoral loser, falling as much as 1.6 per cent on Monday. Shares of Tata Steel, Hindalco and NMDC were trading with a loss of nearly 1 per cent. Key levels to watch: If the market breaches the 24,650 level, it could shift sentiment, leading to a retest of levels around 24,450, according to Shrikant Chouhan, head of equity research at Kotak Securities. However, a break of 24,450 could trigger the market may fall to 23,900 levels, Chouhan said, adding that the strategy should be to design a trading strategy with minimal stop losses.
Mint
2 days ago
- Business
- Mint
Recommended stocks to buy today: Top stock picks by market experts for 2 June
Benchmark indices Sensex and Nifty 50 ended the week on a cautious note amid global trade tensions and domestic policy uncertainty, marking a second straight week of consolidation. The Nifty 50 closed at 24,750.70, down 0.33%, while the Sensex fell 0.22% to 81,451.01. Sectoral performance was mixed—PSU Banks led with a 2.88% gain, while metal, PSE, and auto indices declined 1.69%, 1.14%, and 0.98%, respectively. Two stock recommendations for today by MarketSmith India: APAR Industries Ltd (current price: 8,114) Why it's recommended: Consistent financial growth, diverse business segments Key metrics: P/E: 39.13 | 52-week high: ₹11,779.90 | Volume: ₹ 59.71 crore Technical analysis: Trendline breakout Risk factors: Raw material price volatility, cyclicality of end-user industries Buy at: ₹8,114 Target price: ₹9,450 in three months Stop loss: ₹7,420 Also Read: This textile star's rally masks a margin meltdown. Should investors be worried? ITC Hotels Ltd (current price: ₹216.50) Why it's recommended: Strong post-demerger performance, asset-light expansion strategy. Key metrics: P/E: 169.76 | 52-week high: ₹ 223 | Volume: ₹224.78 crore Technical analysis: Retest of trendline breakout Risk factors: Cyclical nature of the hospitality industry, intense competition Buy at: ₹216.50 Target price: ₹255 in three months Stop loss: ₹199 Top three stocks recommended by Ankush Bajaj: HDFC Bank Ltd (current price: ₹1945) Why it's recommended: The stock has shown a strong rebound from support levels and, on the lower time frame, has given a consolidation breakout, which indicates the start of a new trend and suggests a potential for further upside. Key metrics: Resistance level: ₹1,975 (short-term target) | Support level: ₹1,924 (pattern invalidation level) Pattern: Consolidation breakout on lower timeframe with sustained price action RSI: Bullish on both daily and lower timeframes, confirming strength in the breakout Technical analysis: The breakout from the consolidation zone on lower timeframes, combined with improving RSI and price strength, points to a continuation of the bullish trend. Sustaining above ₹1,945 increases the probability of achieving the projected target. Risk factors: A breakdown below ₹1,924 could invalidate the bullish breakout. Broader market corrections or sector-specific weakness may also affect price action. Buy at: ₹1,945 Target price: ₹1,975 in 4–5 days Stop loss: ₹1,924 Also Read: FMCG stocks face margin pressure. Here's why Tata Steel Ltd (current price: ₹161) Why it's recommended: The stock is in an uptrend and is currently trading at a major demand zone between ₹161– ₹158. A bounce back is expected from this level, suggesting a potential for further upside. Key metrics: Resistance level: ₹167– ₹171 (short-term target zone) | Support level: ₹158 (pattern invalidation level) Pattern: Pullback setup from demand zone in ongoing uptrend RSI: Bullish reversal expected from oversold zone on lower time frames, indicating early signs of strength Technical analysis: The stock is approaching a key support area within an ongoing uptrend. The confluence of the demand zone and oversold RSI on lower timeframes increases the likelihood of a bounce toward ₹167– ₹171. Risk factors: A breakdown below ₹158 could invalidate the bullish setup. Broader market weakness or unexpected sector pressure could affect price movement. Buy at: ₹161 Target price: ₹167– ₹171 in 4–5 days Stop loss: ₹158 Also read: This textile star's rally masks a margin meltdown. Should investors be worried? Union Bank Ltd (current price: ₹146.80) Why it's recommended: The stock is showing strength in an ongoing uptrend and has taken support near ₹145 levels. On the lower time frame, it is forming a bullish structure, indicating the potential for a quick upward move. Key metrics: Resistance level: ₹151– ₹153 (short-term target zone) | Support level: ₹144 (pattern invalidation level) Pattern: Support-based entry in bullish continuation setup RSI: Bullish on lower timeframes with rising momentum, supporting the price action Technical analysis: Union Bank has maintained higher lows and is showing signs of fresh momentum from the support zone. Sustaining above ₹146.80 may trigger a move toward the ₹151– ₹153 zone. Risk factors: A breakdown below ₹144 could negate the bullish view. Broader market volatility or sector rotation could limit upside. Buy at: ₹146.80 Target price: ₹151– ₹153 in 4–5 days Stop loss: ₹144 Stocks to trade today as recommended by Trade Brains Portal Pidilite Industries Ltd (Current price: ₹ 3,125) Target price: ₹ 3,650 in 16-24 months Stop-loss: ₹ 2,862 Why it's recommended: Pidilite is a pioneer in consumer and specialty chemicals in India and the market leader in the adhesives and sealants industry. It offers a diverse product range, including adhesives, sealants, waterproofing solutions, construction and automotive chemicals, arts and crafts products, industrial resins, organic pigments, polymers, and more. As of FY25, the company has 68 manufacturing units, with over 1,300 SKUs exported annually and more than 60 distribution centers across the country. It has some popular brands in its portfolio, like Fevicol, M-Seal, Fevi kwik, Dr Fixit, Roff, and more. The company has consistently achieved a consolidated net sales growth of 11% CAGR over the past decade. The company has managed to improve its Ebitda margin, which has been in a steady upward trend over the last 10 years, rising from 16% in FY15 to 23% in FY25. Moreover, net sales for FY25 stood at ₹13,094 crore, up by 6% from ₹12,337 crore in FY24. EBITDA stood at ₹3,013 crore in FY25, a growth of 11% from ₹2,707 crore in FY24. Profit before tax and exceptional items for FY25 stood at ₹2,848 crore, growing by 16% YoY. Profit after tax for FY25 was at ₹2,096.17 crore as against ₹1,747.42 crore in FY24, recording a growth of 20%. The company has a diversified portfolio, which currently caters to various industries like infrastructure, real estate, packaging, paper, leather, paints, and more. It is venturing into high-growth industries like electronics, EVs, and semiconductors. It has an exclusive partnership with CollTech Group, which has extensive experience in providing electronics adhesive solutions. This partnership may become a good synergy between both companies to expand their presence further in the electronics sector. Additionally, Brand like Roff has a lot of room for growth due to growth in the tile market, which stood at ₹43,000 crore as of FY24 and is expected to reach ₹62,000 crore by 2027. Key growth drivers for the company are penetration in rural and semi-urban markets and international expansion through various business models. On a macro view, the specialty chemicals market in India is expected to grow faster than China, increasing its market share from 3-4% in 2021 to 6% by 2026, as per a Crisil report. Risk Factor: A significant portion of raw materials is exposed to crude oil price volatility. Key elements like vinyl acetate monomer (VAM), synthetic resins, and other derivatives are crude oil-based and are used by the company. The company has international subsidiaries in Bangladesh, Sri Lanka, and African countries, which are prone to geopolitical and economic uncertainties and volatility in input costs. Cipla Ltd (Current price: ₹ 1,463) Target price: ₹ 1,690 in 12 months Stop-loss: ₹ 1,345 Why it's recommended: Cipla is a global pharmaceutical company with more than 85 years of experience. It supplies branded and generic medicines to more than 170 countries globally. The company is well diversified in both geographic presence and product offerings. It offers more than 1,500 products in 65 therapeutic categories, with more than 50 dosage forms covering a wide spectrum of diseases. The company's Indian business accounts for 42% of Cipla's revenue and grew at a healthy 7% YoY as of FY25. Cipla is the largest pharmaceutical company in India by volume. It has 26 brands that earn more than ₹100 crore in revenue. One of its brands, Foracort, became the 1st brand to cross ₹900 crore in the history Indian pharmaceutical market. In FY25, Cipla saw a growth of 8% YoY in its income from operations at ₹27,548 crore, with an Ebitda growth of 14% at ₹7,128 crore. Their Ebitda margin grew from 24.5% in FY24 to 25.9% in FY25, and the return on invested capital (ROIC) grew to 33% from 31% last year. Cipla recorded a profit after tax (PAT) growth of 28%, from ₹4,106 crore in FY24 to ₹5,273 crore in FY25, with their PAT margin expanding from 16.1% to 19.1% now. Cipla's R&D investment stood at ₹1,524 crore, which is 5.5% of revenue. The company's total debt has been reduced from ₹559 crore in FY24 to ₹438 crore in FY25, and it has been maintaining a healthy cash balance of ₹10,807 crore as of FY25. Consumer health brands such as Nicotex, Omnigel, and Cipladine ranked no. 1 in the consumer health market. Cipla's One Africa business, constituting 14% of revenue, grew at 12%, and the emerging markets and Europe business, which accounts for 12% of revenue, saw a growth of 15%. Cipla's North America business, contributing 29% of total revenue, grew marginally by 3% and secured drug approvals from ANDA & NDA for Lanreotide Injection, Nilotinib, and Nano Paclitaxel. Total ANDA & NDA portfolio and pipeline as of FY25 stood at 284, with 109 under approval and tentatively approved categories. Cipla's branded prescription business continued to outpace the market growth in key chronic therapies like respiratory, anti-infectives, urology, and cardiac. Trade Generics is back on a growth trajectory with 19 new launches in FY25, anchor brands of the subsidiary Cipla Health Limited continue to grow bigger. The company is focused on expanding its pipeline, with key respiratory, peptide, and complex generic assets in progress, and several launches expected between FY26 and FY28. Cipla has made many strategic alliances throughout the year, which have accelerated its inorganic growth. Risk Factor: Cipla operates in a highly regulated industry, and any changes in regulatory norms or failure to comply with existing norms could impact its operations. Additionally, any interruptions in the supply chain and non-compliance with required quality norms by vendors can disrupt its manufacturing process, leading to product shortages and a material adverse impact on the reputation and revenues. Additionally, the US president's recent plan to cut down drug prices in the country could impact the revenues of Cipla, as the company generates 29% of its revenue from North America as of FY25. Raja Venkatraman has recommended the following two stocks: Shaily Engineering Plastics Ltd CMP: ₹2,016.20 | Target: ₹2,250–2,350 | Stop Loss: ₹1,850 | Time Horizon: 1 Month Shaily Engineering Plastics Ltd is navigating global trade headwinds—including the reimposed 26% Trump-era tariffs—by doubling down on supply chain partnerships, innovation, and a premium product strategy. The company's Q4 FY25 performance underscored its adaptability, with total income rising 27.7% year-on-year to ₹217.83 crore, operating profit up 75.7% at ₹43.39 crore, and net profit surging 47.9% to ₹28.59 crore. Technically, Shaily has held firm through recent volatility, forming higher lows and consolidating between ₹1,400 and ₹1,950. A bullish breakout in late April, supported by volumes, suggests upside potential toward the ₹2,250– ₹2,350 range. Traders may consider long positions above current levels or on dips toward ₹1,900, with a stop-loss below ₹1,850. Elgi Equipments Ltd CMP: ₹535.20 | Target: ₹615 | Stop Loss: ₹490 | Time Horizon: 1 Month Elgi Equipments Ltd, a key player in air compressors, is adapting to sectoral consolidation and global trade challenges by scaling operations, enhancing efficiencies, and diversifying into premium segments. Its Q4 FY25 revenue rose 15% to ₹993 crore, while net profit jumped 34% year-on-year to ₹102 crore, thanks to proactive cost and pricing strategies that offset export tariffs. After a sharp correction post-December highs, the stock formed a double bottom near ₹100 and has rebounded strongly, crossing the Ichimoku Cloud and key resistance at ₹500. A breakout above the neckline, rising volumes, and strengthening momentum indicators point to further upside. Investors can consider long entries above CMP or on dips toward ₹505, targeting ₹615 with a stop-loss below ₹490. Ankush Bajaj is a Sebi-registered research analyst. His registration number is INH000010441. Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223. MarketSmith India: Trade name: William O'Neil India Pvt. Ltd; Sebi-registered research analyst registration number: INH000015543 Trade Brains Portal is a stock analysis platform. Its trade name is Dailyraven Technologies Pvt. Ltd, and its Sebi-registered research analyst registration number is INH000015729. Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors. Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
Hans India
5 days ago
- Business
- Hans India
Trade Setup May 30: Nifty rebounds sharply ahead of May 30; Buying opportunity in dips
The broader market staged a strong comeback on May 29 even as monthly derivatives expiry imparted early volatility. After an initial sell-off, the Nifty 50 rallied more than 200 points from session lows to close at 24,834—up 81 points—remaining comfortably above the 24,800 mark. IT shares led the rebound, bolstered by positive global cues after a U.S. court struck down blanket tariffs imposed by the Trump administration. Mid- and small-caps outperformed again, with the Nifty Midcap 100 and Smallcap 100 rising 0.55% and 0.59%, respectively. Among sectoral indices, Metals, Realty, Pharma and IT saw notable gains; only FMCG and PSU Banks ended in the red. IndusInd Bank was the day's top Nifty gainer, climbing 2% despite SEBI barring five key executives—including former MD & CEO Sumant Kathpalia—from securities trading amid insider-trading proceedings. Looking ahead to May 30, analysts see room for further consolidation with dips providing buying opportunities. HDFC Securities' Devarsh Vakil notes that the 20-day EMA, now at 24,618, should offer immediate support, while the 24,900–25,000 zone caps upside moves. Asit C. Mehta's Hrishikesh Yedve recommends a 'buy on dips' approach, pointing to resistance near 25,000–25,100. Bajaj Broking expects the Nifty to maintain its positive bias toward 25,200–25,300, provided it holds above 24,700–24,650 short-term support (with deeper support at 24,400–24,500). Conversely, LKP's Rupak De warns that a breach below 24,670 could trigger a sharp correction toward 24,400/24,300, whereas a hold above that level might spark a swift recovery back to 25,000–25,150. On the banking front, the Nifty Bank index ended at 55,546, up 129 points. SAMCO Securities' Om Mehra says a break above 55,900 could pave the way for retesting record highs, while a slide below 55,100 may invite mild selling pressure. Yedve adds that as long as the 21-day DEMA around 54,900 holds, a relief rally toward 56,000 remains on the cards; resistance looms at 56,000–56,100. Corporate earnings will be in focus next, with quarterly results due from Apollo Hospitals, Vodafone Idea, Nykaa, AstraZeneca Pharma, Genus Power & Infra, Titagarh Rail Systems, KNR Constructions, EaseMyTrip, Inox Wind, Inox Green Energy, Bajaj Auto, Mazagon Dock, NBCC, Lemon Tree Hotels and Amara Raja.
Mint
26-05-2025
- Business
- Mint
City Union Bank to Moil - Vinay Rajani of HDFC Sec suggests these 3 stocks to buy in the near-term
Stock market today: The Indian stock market started on a positive note as major indices Nifty 50 and Sensex kicked off the trading day with gains, reflecting a favourable sentiment. The Sensex rose by 0.66% or 537 points to reach 82,270, while the Nifty 50 climbed 0.62% or 154 points to hit 24,999. The domestic benchmark indices rallied in early trading on Monday following reports that India has ascended to become the world's fourth-largest economy. In addition, the early onset of the monsoon, the Reserve Bank's announcement of a record ₹ 2.69 lakh crore dividend to the government for FY25, and US President Donald Trump's postponement of 50 percent EU tariffs to July 9 contributed to the market's optimistic outlook, as noted by experts. As of 12:42 IST, the Nifty 50 rose 0.47% or 121.70 points at 24,975.70 level, and the Sensex increased 0.50% reaching 82,126.87 levels. Vinay Rajani of HDFC Securities recommends ICICI Prudential Nifty India Consumption ETF, City Union Bank, and Moil shares in the short-term. Also, check out his views on the overall market. Last week, Nifty 50 found support on its 20 DEMA and bounced back. 20 days EMA is currently placed near 24,500 levels. Nifty 50 is currently placed above all key moving averages, indicating bullish trend on all time frames. Last week's low and 20 days EMA are projecting strong support in the zone of 24,450-24,500 for the Nifty 50. Nifty 50 is currently passing from the consolidation, which will be violated once Nifty 50 breaks out above 24,950 resistance. Above 24,950, Nifty 50 could head towards next resistance band of 25,200-25,300, derived from the 76.4% and 78.6% retracement of the entire fall seen from all time high of 26,277 to recent swing low of 21,743. Bank-Nifty has been consolidating in the narrow range for last 5 weeks. Any level above 55,700 would confirm the fresh breakout on the upside. On the lower side band of 54,400-54,500 could offer support in the index. Nifty Midcap index has found resistance on the downward sloping trend line, while Nifty Small-cap index has formed 'Doji' candlestick pattern on the weekly charts. These developments show some sign of caution in the broader market. However, If these indices surpass the last week's high then they would negate the possibility of bearish trend reversal. Nifty PSU Bank index has broken out from the downward sloping trendline on the weekly chart. Weekly Ratio chart of PSU Banks vs Nifty 50 also confirms the potential outperformance from PSU banks. Apart from PSU Banks, Metal Index is showing good strength on the chart and should perform well in the days to come. Emerging and Asian market equity indices also have been in to narrow consolidation for last many sessions. Dollar index has resumed its down trend, as it has showed bearish breakout from 'Flag' pattern on the weekly chart. Falling dollar is usually augurs well for emerging markets and bullions. Primary trend is bullish but for the short-term consolidation is going on in the Nifty 50. Traders should continue to hold on to the long positions with 24,450 stoploss in the Nifty 50. Any level above 24,950 will confirm the fresh bullish breakout. Above 24,950, we can expect Nifty 50 to extend the rise towards next resistance zone of 25,200-25,300. Vinay Rajani of HDFC Securities recommends these three stocks in the near term - ICICI Prudential Nifty India Consumption ETF, City Union Bank, and Moil. Downward sloping trend line breakout on the weekly chart. Price has been sustaining above 200 DEMA resistance. Price is now placed above 20, 50 and 200 days EMA. Daily and weekly RSI has reached above 50, indicating sustainable up trend. Weekly MACD is now placed above signal and equilibrium line Breakout from Symmetrical triangle pattern on the weekly chart. City Union Bank share price has been sustaining above 200 DEMA resistance. Stock price is now placed above 20, 50 and 200 days EMA. Monthly RSI has reached above 50, indicating sustainable up trend. Weekly MACD is now placed above signal and equilibrium line. Breakout from the long term consolidation. MOIL share price has been sustaining above 200 DEMA resistance. Stock price is now placed above 20, 50 and 200 days EMA. Daily RSI has reached above 50, indicating sustainable up trend. Daily MACD is now placed above signal and equilibrium line. 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.
Mint
20-05-2025
- Business
- Mint
Banks, IT to defence: Dr Vikas Gupta of OmniScience Capital lists sectors that can turn wealth creators over 3-5 years
Dr. Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital, believes several sectors in India are showing immense investment opportunities, with banking, IT, logistics, defence and power among others can emerge as wealth-creating sectors over the next few years. On the index level, he sees things aligning, with the reclusive earnings recovery possible this year. However, for index investors in mid and small-cap, he advised being careful as these indexes are overvalued. Edited excerpts: As the various factors causing uncertainty are settling down, the earnings growth remains the most important factor which determines the future market direction. We should ideally not focus on the earnings at the index level, but rather focus on specific sectors and their earnings growth. For example, for the Nifty 50, after financial services, IT, and oil & gas are the largest contributors. IT earnings could take some more time to recover. Oil & gas are heavily dependent on volatile global market prices of crude oil. So these kinds of pulls are making the Nifty 50 earnings growth slightly challenging. Despite this, we expect a double-digit earnings growth for the Nifty 50 this year. Possibly, second half onwards, we should start seeing some predictability. Irrespective of the headline-level index earnings, several industries are doing quite well and showing steady growth. The DII ownership increase reflects the consistent allocation via SIP and lump sum by Indian retail investors to mutual funds through ups and downs. The mutual fund inflows continued despite the markets falling from September 2024 to February 2025. During this period, the FIIs were selling and DIIs were buying, thus increasing the DII ownership relative to FIIs. The inflows to DII from Indian investors continue. However, now the FIIs have started coming back, and hence the markets are responding since both DIIs and FIIs are competing for investing in the markets, and thus the additional FII money is pulling the markets up. Eventually, if the FII money keeps flowing, they could start taking their ownership share higher. Nifty PSU Banks are trading at a PE of 7. This is extremely low and shows that PSU Banks might be available at strong discounts to their intrinsic values. In fact, according to the scientific investing framework, banks, especially PSU Banks, have strong balance sheets with low NPAs and unutilised lending capacity. As the lending capacity is utilised due to strong demand for capital from Government of India's capex in infrastructure, corporate capex requirements and household capital demand for housing and consumer durables, the return on equity of the banks should increase faster than the asset growth. Thus, driving strong earnings growth. A rerating of the PSU banks to even 10-15 PE on accelerating earnings should drive huge value in the investor portfolio. The risks would be a slower demand for capital. The risk of increasing NPAs seems low in the next couple of years. Our scientific investing framework has thrown up several promising growth vectors which could be wealth creators over the next 3-5 years. These are growth vectors which have double-digit expected growth rates over the next 5-10 years or more. However, these companies are available at large discounts to their intrinsic values. We already discussed PSU banks and banks in general. Banking on growth is one of our strongest, most promising themes. Second, we see a strong opportunity in the housing finance segment. Another strong growth vector is power. Besides these, we believe that logistics would be one of the unanticipated growth vectors. On IT, once the US economy settles down, we should expect gains from the AI-related demand. However, this could take a couple of years to manifest. We are also optimistic about seeing India emerge as a global manufacturing hub with Make in India. Also, we are excited about the commercial services space. Also, remember that defence, as highlighted by Operation Sindoor, is a multi-decadal theme for India but one has to be careful on the valuation front as far as defence companies are concerned and should be selective or broaden their investment universe to include other dimensions of defence beyond arms and ammunition to economic warfare, cyber security, strategic materials, logistics and supply chain etc. Another multi-decadal theme is Railways, with growth visibility for a long time. With the Indian large-cap space defined as the top 100 stocks and midcaps as the next 150 stocks, this is a relatively small universe to select stocks. On the other hand, there are 1000s of stocks in the small-cap space. Naturally, the probability of finding investment opportunities in the small-cap space is higher. However, as discussed earlier, banks and power companies are mostly large and midcaps. Housing finance, logistics, manufacturing, and commercial services are mostly small-caps. Railways and defence companies are across the capitalisation spectrum. Thus, today one can find opportunities in both large and small-caps. But we would caution index investors in mid and small-cap to be careful, as these indexes are overvalued. However, if one is creating an active portfolio, there are opportunities. But one must stay away from the popular companies and use a well-designed investment process similar to the Scientific Investing Framework that we follow. This helps safeguard our portfolios from capital destroyers (weak balance sheets/loss-making companies), capital eroders (companies with no moats) and capital imploders (overvalued companies). We are not too focused on the chemical sector since there is a strong dependency on crude oil, China and global demand-supply factors. These factors make it quite difficult to have confidence in their revenue and earnings growth. Currently, they are not on our radar. Disclaimer: This story is for educational purposes only. 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.
