A worker shields his face at a furnace. (Photographer:George Nicolae/Bloomberg News)

Stocks That Analysts Are Backing Amid Rupee Woes

Analysts are betting on the so-called defensives to tide over the bout of volatility in the Indian equity markets triggered by the relentless fall in the local currency.

Select software exporters and most of the drugmakers lead the list of stocks with maximum target price upgrades, according to Bloomberg data. Meanwhile, consumer discretionary and financial stocks have corrected the most from this year’s peak which has reduced the gap between the target and market prices.

Four of the top five companies with a market capitalisation of Rs 25,000 crore and above that have seen the maximum target price upgrade are from the technology and pharma sectors.

Stocks That Analysts Are Backing Amid Rupee Woes
Stocks That Analysts Are Backing Amid Rupee Woes

The bullish sentiment has reflected in the stock performance as well. The NSE Nifty I.T. rose 1.15 percent so far this month, compared to a 3.3 percent decline in the NSE Nifty 50 Index. The NSE Nifty Pharma Index, which was trading half-a-percent higher until yesterday, gave up all its monthly gains at the end of today’s trade.

Pharma has seen earnings downgrade in the last few years. That seems to be changing now, according to Pankaj Murarka, chief investment officer at Renaissance Investment Managers. Though stock prices have run ahead of earnings, he said, pharma could be a good investment bet over the next three to five years.