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    We are quite bullish on the India growth story: Neeraj Chadawar

    Synopsis

    We believe that we are on the last leg of rate hike cycle and sometime in the mid of 2023 Fed will stop raising the rates and if the market sail through the next six to nine months smoothly we could see the next level of triggers emerging in the market.

    Neeraj ChadawarETMarkets.com
    We advise our investors to maintain a good liquidity of around 10% and use dips in a phased manner.
    The current set up is a buy on dips market because the current VIX level is well below the long term average which means that market is not in a panic zone. We advise our investors to maintain a good liquidity of around 10% and use dips in a phased manner says Neeraj Chadawar, Axis Securities.

    You have a bull case target of 22500 for the Nifty and the base case is closer to around 20400. What is your own expectation at the index level of how the year 2023 is likely to pan out?
    We have come up with our top picks report which highlights that style and sector rotation will be the key going forward. Despite the volatile macroeconomic situation from last couple of months Indian equity market has shown resilience and has outperformed all the global equity market by a superior margin thanks to our robust economic outlook.

    We are quite bullish and optimistic on the India growth story. Six to eight odd months back when we had entered into the rate hike cycle we had set the Nifty target of 18400 for March 2023 and we have achieve that target well in advance. Now after the Q2 we have rolled over our Nifty target to December 2023 at 20400 that is our base case assumption which could provide you 9% to 10% upside from the current level.

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    The current set up is a buy on dips market because the current VIX level is well below the long term average which means that market is not in a panic zone.

    We advise our investors to maintain a good liquidity of around 10% and use dips in a phased manner.

    We believe that we are on the last leg of rate hike cycle and sometime in the mid of 2023 Fed will stop raising the rates and if the market sail through the next six to nine months smoothly we could see the next level of triggers emerging in the market.

    When you see such upside it will not be that all Nifty 50 stocks will do well. So what are your top large cap picks and why?
    At this juncture the market positioning has shifted towards banks and the domestic cyclical stocks. So we like banks and our top recommendations are ICICI Bank and SBI. In the midcap space we are bullish on the Federal Bank. Along with the banking sector we are very bullish on the domestic cyclical recovery and that is the reason we have added recently PNC Infra in our top picks as the H2 is likely to be better for the infra companies.

    Along with that we have recently added Infosys to our top picks and we are seeing that there has been a meaningful correction in the IT index. IT Index has already corrected from 32x on one year forward PE. Two, we are currently trading at 22x and it has already made a bottom during the month of September and we are seeing recovery in the IT Index in the month of October which continued in November and that is the reason we believe that most of the slowdown risk has already been factored in the current valuation.

    Wanted your take regarding a couple of specific counters. As far as Varun Beverages is concerned we have seen quite a bit of upside on that counter. Where do you see that one headed plus the likes of CCL Products and Praj Industries from the small cap space is something that you like. Can you explain the rationale?
    Varun Beverages is a good growth story and right now in the post COVID world we are seeing that the entire economy has opened up. Varun Beverages has now entered into untapped territory of south and west India and under penetrated category of East India and the company is seeing good traction in those territories. We believe that inupcoming months, the companies will continue to deliver good performance going forward.

    Regarding CCL products, it is an instant coffee maker and we believe that the company is poised for growth in the next three years. We are expecting profitability to go double from here and ROE of the company could achieve more than 20% in FY24 and FY25. Hence we believe it is a good investment opportunity at the current juncture.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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