The performance of Indian stock markets is poor compared to other markets of the world. However, due to this the Indian market is no longer as expensive as before. Brokerage firm CLS has said that the sentiment regarding the Indian market has weakened, which is a good sign of contra buy. Contra buy means an investment strategy contrary to the trend.
Nifty fell 3.5 percent in September quarter
The Nifty 50 index has fallen by about 3.5 percent in the September quarter. Due to this, India is at second place in the list of worst performing big markets in the world. This is the worst performance of Indian markets in any single quarter compared to emerging and Asian markets (except Japan) in the last 14 years.
India is the most expensive market after Taiwan
Foreign brokerage firm (CLSA) has said, “The decline in EPS is mostly the decline in Nifty. This means that the valuation of Nifty is still the same as it was at the beginning of the September quarter. Due to this, India is the second most expensive market after Taiwan among the emerging markets.”
Indian market premium decreased compared to emerging markets
However, due to the poor performance of Nifty 50, the valuation premium of the Indian market compared to key indices of emerging markets and China has fallen to a four-year low. CLSA, based on its proprietary India-Bull Bear Index, has said that the sentiment has reached a very bearish zone.
The roar of these 25 stocks will be heard far and wide
CLSA has said that the number of experts who expect India’s performance to be better is only 10.1 percent. The brokerage firm said that historically this is a ‘good contra signal’. The brokerage firm has identified 25 such stocks, which can roar in the coming times. These include stocks of NTPC, Oil & Natural Gas, DMart, DLF and Varun Beverages.
Increase may reach up to 70 percent
Hong Kong brokerage firm says that some of these 25 stocks may rise by 70 percent. He has said about ONGC that it can get big benefit from further fall in Brent crude prices. However, there is no expectation of a major fall in Brent crude at present. OPEC has increased the supply significantly.
ONGC stock at attractive level
He has said that the dividend yield of ONGC is around 6 percent, which is quite attractive. This is the highest dividend yield among big companies in India. ONGC is trading at par with its historical average PE. However, it is lower than the PE of global rivals and Oil India. This is attractive given the expectation of good growth in production.
Investment opportunities in DMart and DLF also
NTPC is the second stock in this list. Keeping India’s energy security in mind, the company has focused on expansion. It is also trying to change its business according to the energy transition. It is on track to achieve the target of 60 GW NEF by FY2032. The third stock on the list is DMart, whose strength is its strong business model. Real estate company DLF is also included in the list of 25 top stocks.