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NEW DELHI: Asia’s leading brokerage and investment group sees broad-based slowdown in India’s growth story.
Going forward risk aversion will lead to rise in cost of capital which will thereby lead to EPS cuts in commodity stocks, banks which might see further downgrades. CLSA views the Reserve Bank of India will change its policy soon.
Stocks with high degree of pledged shares i.e promoters who have over 50% of their stake pledged with the lenders are likely to face further slowdown going forward according to CLSA.
Stocks such as Suzlon Energy Ltd, United Spirits Ltdand Unitech Ltd might face some selling pressure. In today’s trade Suzlon closed 6.8% lower, United Spirites Ltd slipped 3.6% and Unitech Ltd dropped 3.5%.
Export related stocks, IT and commodity stocks looks vulnerable. Stocks such as Hindalco Industriesltd, Reliance Industries Ltd, Sterlite Industries Ltd,Tata Motors Ltd etc might face some pressure going forward.
Companies which are cash starved or which are highly leveraged which includes stocks like DLF Ltd, Jet Airways Ltd and JSW Steel Ltd will also face some downward pressure.
In today’s trade DLF Ltd closed 6.8% lower, Jet Airways Ltd slipped 1.3% and JSW Steel Ltd dropped 3.5%.
Under the banking space there is heightened risk of NPAs going forward hence they like private bank.
CLSA sees lot of resilience in pharma companies and sectors which have in high proportion of rural consumption theme playing in the likes of Mahindra & Mahindra Ltd, ONGC, Coal India Ltd, NTPC Ltd and power Grid Ltd should provide better downside protection.
Goldman Sachs
Goldman Sachs on Monday upgraded India to “marketweight” after keeping an “underweight” rating for over a year citing a likely improvement in the macroeconomic situation, lower oil prices, and attractive stock valuations.
Goldman Sachs had held India at “underweight” for over a year based on inflation risks, concerns over valuation and policy tightening overhangs. Goldman Sachs expects the broader 50-stock Nifty index September 2012 target at 6600.
It has named six stocks across sectors in its conviction list–Tata Steel, Sobha Developers, IndusInd Bank, Oil & Natural Gas Corp. , Hindustan Petroleum and Bosch Ltd.
The firm expects India’s GDP growth to slow to 7.3 percent in the current fiscal year from 7.5 percent previously.
Going forward risk aversion will lead to rise in cost of capital which will thereby lead to EPS cuts in commodity stocks, banks which might see further downgrades. CLSA views the Reserve Bank of India will change its policy soon.
Stocks with high degree of pledged shares i.e promoters who have over 50% of their stake pledged with the lenders are likely to face further slowdown going forward according to CLSA.
Stocks such as Suzlon Energy Ltd, United Spirits Ltdand Unitech Ltd might face some selling pressure. In today’s trade Suzlon closed 6.8% lower, United Spirites Ltd slipped 3.6% and Unitech Ltd dropped 3.5%.
Export related stocks, IT and commodity stocks looks vulnerable. Stocks such as Hindalco Industriesltd, Reliance Industries Ltd, Sterlite Industries Ltd,Tata Motors Ltd etc might face some pressure going forward.
Companies which are cash starved or which are highly leveraged which includes stocks like DLF Ltd, Jet Airways Ltd and JSW Steel Ltd will also face some downward pressure.
In today’s trade DLF Ltd closed 6.8% lower, Jet Airways Ltd slipped 1.3% and JSW Steel Ltd dropped 3.5%.
Under the banking space there is heightened risk of NPAs going forward hence they like private bank.
CLSA sees lot of resilience in pharma companies and sectors which have in high proportion of rural consumption theme playing in the likes of Mahindra & Mahindra Ltd, ONGC, Coal India Ltd, NTPC Ltd and power Grid Ltd should provide better downside protection.
Goldman Sachs
Goldman Sachs on Monday upgraded India to “marketweight” after keeping an “underweight” rating for over a year citing a likely improvement in the macroeconomic situation, lower oil prices, and attractive stock valuations.
Goldman Sachs had held India at “underweight” for over a year based on inflation risks, concerns over valuation and policy tightening overhangs. Goldman Sachs expects the broader 50-stock Nifty index September 2012 target at 6600.
It has named six stocks across sectors in its conviction list–Tata Steel, Sobha Developers, IndusInd Bank, Oil & Natural Gas Corp. , Hindustan Petroleum and Bosch Ltd.
The firm expects India’s GDP growth to slow to 7.3 percent in the current fiscal year from 7.5 percent previously.
source: ET
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