ETMarkets.comNEW DELHI: The new year has started on a positive note for Dalal Street as the Sensex has advanced nearly 1,500 points during the Santa Rally period - last 5 trading days of 2022 and first two sessions of 2023.
Nifty returns in 2022 were muted at 4% in Indian rupee terms but foreigners lost money as the index fell 6% in US dollar terms during the year due to upheaval in the currency market.
After 2022 turned out to be a tale of sweet and sour returns for equity investors, insiders expect the new year 2023 to be a game of individual stocks.
Here are top predictions and stock picks for 2023 from 10 brokerages:
1) Morgan Stanley
Global brokerage firm Morgan Stanley has a Sensex base case target of 68,500, which means that the index may trade at a trailing P/E multiple of 25x, higher than the 25-year average of 20x. In the bull case scenario, of which there is a 30% probability, the index can zoom up to 80,000.
Top stock picks: Morgan Stanley said as correlations across stocks are off lows, so the market is transitioning to a stock pickers’ one. It is overweight on financials, tech, consumer discretionary and industrials and underweight all other sectors. Stocks in its focus list includes Nykaa, Maruti Suzuki, Titan, ICICI Bank, SBI Cards, SBI Life, HAL, L&T, Infosys and UltraTech Cement.
2) Jefferies
Jefferies believes that Nifty will be range-bound at 17,000-19,500 due to valuation impediments. "With India among the best performing markets globally in 2022 and hitting new highs recently, valuations at 20x PE and 225 bps on yields gap are trending above 1sd levels and remain a key overhang for market performance in 2023," it said.
Top stock picks: The brokerage firm’s key picks are large banks (ICICI Bank, SBI), developers (GPL, DLF), auto cos (Maruti, Tata Motors, TVS), staples (HUL, GCPL, Britannia) and select capital goods (L&T, Thermax, CCRI).
3) BofA
Global brokerage BofA Securities expects Nifty to deliver a muted but positive return, implying India could underperform other emerging markets but outperform developed markets. It expects Nifty to end the year at 19,500 but may range between 17,000 to 20,000 on global macro worries.
Top stock picks: BofA's portfolio skew balances volatility with an overweight stance on domestic cyclicals, financials, industrials, cement and global revival play - metals, staples and utilities. It has buy ratings on HDFC Bank, ICICI Bank, SBI L&T, HUL, ITC, among others.
4) Nomura
Nomura expects a muted return from Nifty this year with a target of 19,030. "Unlike most markets, Nifty 50 is trading at higher valuation multiples than pre-COVID levels. The valuation premium to EM is at 70% vs the historical average of ~40%," it said, adding that it sees mid single-to-low double-digit earnings risk for FY24.
Top stock picks: The brokerage prefers domestic plays with low earnings sensitivity to economic slowdown. Top picks include SBI, Axis Bank, L&T, HUL, RIL, KEC International, Zydus, Medplus, IGL and Sansera.
5) BNP Paribas
BNP Paribas has downgraded India to neutral rating from overweight with Nifty target at 19,650 in 2023. "Our tactical caution on India arises from the market’s sky-high relative valuations, the possibility of fund reallocations to North Asia with China’s reopening, likely consensus earnings-estimate downgrades in the domestic consumption-oriented sectors and the usual likelihood of volatility around the upcoming budget on 1 February 2023 – the last one before India’s general elections," BNP's Manishi Raychaudhuri said.
Top stock picks: The brokerage is bullish on private banks, insurance, select industrials, consumer discretionary, automobiles and telcos. Stocks in its portfolio include Maruti Suzuki, M&M, Sun Pharmaceutical, Fortis Healthcare, Bharti Airtel, HDFC Bank, ICICI Bank, Axis Bank and SBI Life Insurance.
6) ICICI Direct
Based on a technical analysis and decadal patterns, ICICI Direct's Nifty target for CY23 is placed at 21,400 while strong support is placed at 16,200 levels. It expects mid and smallcaps to outperform largecaps this year.
Top stock picks: Top techno-fund picks include L&T, Ambuja Cements, Bosch, Federal Bank, Sundaram Finance, Bajaj Electricals, KEC International, Mishra Dhatu Nigam and Techno Electric.
7) Axis Securities
Axis Securities has maintained its 2023-end Nifty target at 20,400 by valuing it at 20x on Dec’24 earnings, implying an upside of around 12% from current levels. In the bull case scenario, the index can shoot up to 22,500.
Top stock picks: ICICI Bank, Tech Mahindra, Maruti Suzuki India, State Bank of India, Dalmia Bharat, Federal Bank, Varun Beverages, Ashok Leyland, Infosys, PNC infra, APL Apollo Tubes, HealthCare Global Enterprises, Praj Industries, CCL Products (India), Polycab India, and Bajaj finance.
8) Kotak Securities
Kotak’s base case Nifty target is 18,717 after valuing the index at 17x on FY25 EPS of Rs 1,101. India’s economic and earnings recovery coupled by capital expenditure cycle, (including PLI scheme) is expected to keep Indian markets attractive over the long term, Kotak Securities said.
Top stock picks: Kotak Institutional Equities has added speciality chemical stock SRF in its model portfolio and shaved off positions in Hindalco (40 bps to 150 bps), ICICI Prudential Life (30 bps to 150 bps) and 20 bps each in HCL Tech, Infosys, TCS and Tech Mahindra. Other top picks in its long-term largecap model portfolio includes HDFC Bank, ICICI Bank, SBI, Axis Bank, L&T and M&M.
Kotak's midcap model portfolio, which includes Federal Bank, Cummins India, Crompton Greaves, Sobha, LIC Housing Finance and Union Bank, remains unchanged.
9) Emkay
Emkay Institutional Equities expects Nifty to attain a level of 19,500 by December 2023 given the current situation. Barring any major change in the global macroeconomic and geo-political set-up, it sees Sensex at 64,500.
Top stock picks: The brokerage's largecap portfolio is overweight significantly on banks and auto stocks and underweight IT, NBFCs, consumer staples and OMCs.
Within small and midcaps, top bets include Aditya Birla Fashion and Retail, Ashok Leyland, Escorts, Indian Bank, Zomato, Equitas Holdings, Gravita India, Inox Leisure and TCNS Clothing.
10) Prabhudas Lilladher
Prabhudas' base case scenario analysis shows an upside potential of more than 10-12% in Nifty in 2023.
"India is on the verge of a big capex cycle recovery which will play out in the coming future. Q3 will benefit from improvement in margins given that cost pressures are abating as most agri commodities and crude have cooled off. Global supply chain seems to be in better shape and semiconductor shortage appears to be ebbing now," said Vikram Kasat, Head Advisory, Prabhudas Lilladher.
Top stock picks: The brokerage finds auto, capital goods, defense, real estate, telecom, hospitals, travel, QSR, agrochemicals and retail a compelling theme. Top bets in its model portfolio include ICICI Bank, HDFC Bank, Infosys, TCS, Reliance Industries, Axis Bank and Kotak Mahindra Bank.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Nifty returns in 2022 were muted at 4% in Indian rupee terms but foreigners lost money as the index fell 6% in US dollar terms during the year due to upheaval in the currency market.
After 2022 turned out to be a tale of sweet and sour returns for equity investors, insiders expect the new year 2023 to be a game of individual stocks.
Here are top predictions and stock picks for 2023 from 10 brokerages:
1) Morgan Stanley
Global brokerage firm Morgan Stanley has a Sensex base case target of 68,500, which means that the index may trade at a trailing P/E multiple of 25x, higher than the 25-year average of 20x. In the bull case scenario, of which there is a 30% probability, the index can zoom up to 80,000.
Top stock picks: Morgan Stanley said as correlations across stocks are off lows, so the market is transitioning to a stock pickers’ one. It is overweight on financials, tech, consumer discretionary and industrials and underweight all other sectors. Stocks in its focus list includes Nykaa, Maruti Suzuki, Titan, ICICI Bank, SBI Cards, SBI Life, HAL, L&T, Infosys and UltraTech Cement.
2) Jefferies
Jefferies believes that Nifty will be range-bound at 17,000-19,500 due to valuation impediments. "With India among the best performing markets globally in 2022 and hitting new highs recently, valuations at 20x PE and 225 bps on yields gap are trending above 1sd levels and remain a key overhang for market performance in 2023," it said.
Top stock picks: The brokerage firm’s key picks are large banks (ICICI Bank, SBI), developers (GPL, DLF), auto cos (Maruti, Tata Motors, TVS), staples (HUL, GCPL, Britannia) and select capital goods (L&T, Thermax, CCRI).
3) BofA
Global brokerage BofA Securities expects Nifty to deliver a muted but positive return, implying India could underperform other emerging markets but outperform developed markets. It expects Nifty to end the year at 19,500 but may range between 17,000 to 20,000 on global macro worries.
Top stock picks: BofA's portfolio skew balances volatility with an overweight stance on domestic cyclicals, financials, industrials, cement and global revival play - metals, staples and utilities. It has buy ratings on HDFC Bank, ICICI Bank, SBI L&T, HUL, ITC, among others.
4) Nomura
Nomura expects a muted return from Nifty this year with a target of 19,030. "Unlike most markets, Nifty 50 is trading at higher valuation multiples than pre-COVID levels. The valuation premium to EM is at 70% vs the historical average of ~40%," it said, adding that it sees mid single-to-low double-digit earnings risk for FY24.
Top stock picks: The brokerage prefers domestic plays with low earnings sensitivity to economic slowdown. Top picks include SBI, Axis Bank, L&T, HUL, RIL, KEC International, Zydus, Medplus, IGL and Sansera.
5) BNP Paribas
BNP Paribas has downgraded India to neutral rating from overweight with Nifty target at 19,650 in 2023. "Our tactical caution on India arises from the market’s sky-high relative valuations, the possibility of fund reallocations to North Asia with China’s reopening, likely consensus earnings-estimate downgrades in the domestic consumption-oriented sectors and the usual likelihood of volatility around the upcoming budget on 1 February 2023 – the last one before India’s general elections," BNP's Manishi Raychaudhuri said.
Top stock picks: The brokerage is bullish on private banks, insurance, select industrials, consumer discretionary, automobiles and telcos. Stocks in its portfolio include Maruti Suzuki, M&M, Sun Pharmaceutical, Fortis Healthcare, Bharti Airtel, HDFC Bank, ICICI Bank, Axis Bank and SBI Life Insurance.
6) ICICI Direct
Based on a technical analysis and decadal patterns, ICICI Direct's Nifty target for CY23 is placed at 21,400 while strong support is placed at 16,200 levels. It expects mid and smallcaps to outperform largecaps this year.
Top stock picks: Top techno-fund picks include L&T, Ambuja Cements, Bosch, Federal Bank, Sundaram Finance, Bajaj Electricals, KEC International, Mishra Dhatu Nigam and Techno Electric.
7) Axis Securities
Axis Securities has maintained its 2023-end Nifty target at 20,400 by valuing it at 20x on Dec’24 earnings, implying an upside of around 12% from current levels. In the bull case scenario, the index can shoot up to 22,500.
Top stock picks: ICICI Bank, Tech Mahindra, Maruti Suzuki India, State Bank of India, Dalmia Bharat, Federal Bank, Varun Beverages, Ashok Leyland, Infosys, PNC infra, APL Apollo Tubes, HealthCare Global Enterprises, Praj Industries, CCL Products (India), Polycab India, and Bajaj finance.
8) Kotak Securities
Kotak’s base case Nifty target is 18,717 after valuing the index at 17x on FY25 EPS of Rs 1,101. India’s economic and earnings recovery coupled by capital expenditure cycle, (including PLI scheme) is expected to keep Indian markets attractive over the long term, Kotak Securities said.
Top stock picks: Kotak Institutional Equities has added speciality chemical stock SRF in its model portfolio and shaved off positions in Hindalco (40 bps to 150 bps), ICICI Prudential Life (30 bps to 150 bps) and 20 bps each in HCL Tech, Infosys, TCS and Tech Mahindra. Other top picks in its long-term largecap model portfolio includes HDFC Bank, ICICI Bank, SBI, Axis Bank, L&T and M&M.
Kotak's midcap model portfolio, which includes Federal Bank, Cummins India, Crompton Greaves, Sobha, LIC Housing Finance and Union Bank, remains unchanged.
9) Emkay
Emkay Institutional Equities expects Nifty to attain a level of 19,500 by December 2023 given the current situation. Barring any major change in the global macroeconomic and geo-political set-up, it sees Sensex at 64,500.
Top stock picks: The brokerage's largecap portfolio is overweight significantly on banks and auto stocks and underweight IT, NBFCs, consumer staples and OMCs.
Within small and midcaps, top bets include Aditya Birla Fashion and Retail, Ashok Leyland, Escorts, Indian Bank, Zomato, Equitas Holdings, Gravita India, Inox Leisure and TCNS Clothing.
10) Prabhudas Lilladher
Prabhudas' base case scenario analysis shows an upside potential of more than 10-12% in Nifty in 2023.
"India is on the verge of a big capex cycle recovery which will play out in the coming future. Q3 will benefit from improvement in margins given that cost pressures are abating as most agri commodities and crude have cooled off. Global supply chain seems to be in better shape and semiconductor shortage appears to be ebbing now," said Vikram Kasat, Head Advisory, Prabhudas Lilladher.
Top stock picks: The brokerage finds auto, capital goods, defense, real estate, telecom, hospitals, travel, QSR, agrochemicals and retail a compelling theme. Top bets in its model portfolio include ICICI Bank, HDFC Bank, Infosys, TCS, Reliance Industries, Axis Bank and Kotak Mahindra Bank.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
(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 .)
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Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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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 .)
...moreDownload 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
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