“We include SRF (150 bps) bps) in the portfolio. SRF stock is trading at 25.2X FY2024E EPS and its valuations have become more reasonable after 13-14 months of trading in a narrow band. The stock offers 24% potential upside to our 12-month fair value of Rs 2,830. We have always liked SRF’s business model and its specific chemistry skills,” Kotak said in a note.
It has shaved off positions in
(40 bps to 150 bps), Life (30 bps to 150 bps) and 20 bps each in HCL Tech, Infosys, TCS and Tech Mahindra to create space for SRF.
Other top picks in its long-term largecap model portfolio includes
, , , , L&T and M&M.
Kotak’s midcap model portfolio, which includes
, , , , and , remains unchanged.
Stating that 2022 may be the template for the next few years given heightened geopolitical risks, higher interest rates, slowing China and large climate change-related uncertainties, Kotak’s Sanjeev Prasadi said the expensive valuations of the Indian market and of ‘growth’ stocks pose risks to market performance.
“We expect a de-rating in the multiples of ‘growth’ stocks as the market reconciles to (1) ‘high’ rates through 2023 and (2) limited acceleration in economic growth,” he said.
In 2022, the headline index Nifty outperformed most other global indices as it ended the year about 4% higher. The returns, however, in USD terms, were -6%.
PSUs, financials and consumer staples outperformed the market, while IT Services, healthcare and realty underperformed the market. Largecaps did better than the mid and smallcap indices.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
