Analysts' Top Stock Picks For 2022
From buying the dip to preference for large caps, analysts and market veterans advise investors to temper their expectations of returns in 2022.
Following an unprecedented rebound from pandemic low, the market continued its record-setting rally in 2021, though at a slower pace. The benchmark Nifty 50 has risen 22% till the Christmas weekend this year. Still, it has remained volatile since October highs amid a pullback triggered by valuation concerns and foreign outflows.
Here's what analysts recommend for 2022 and FY23:
The phase of high returns is reaching an end, according to Kotak Securities and making money is going to be challenging in the coming calendar year. It suggested buying on dips or accumulation is the ideal strategy, with preference for large caps.
Here are its top themes and stocks picks for 2022:
Standard Chartered prefers large-cap equities over mid and small caps on relatively better macro fundamentals as it seeks a "greater margin of safety in terms of valuation".
Macro fundamentals, strong earnings expectations and resilient fund flows are likely to be the key drivers for equities in 2022, it said.
The research firm’s outlook focuses more on the sectors than being stock-specific.
Along with large caps, HDFC Securities Ltd. maintains a stock-specific view on mid caps for the upcoming year based.
The brokerage listed its key stock picks and concerns for 2022.
Credit Suisse said financialisation of savings, higher internet penetration, and improved hiring outlook should aid companies from the information technology and the financial services sector. Chemical and pharma active pharmaceutical ingredient sector should be back in favour in 2022 after the recent correction, it said.
“In the mid-cap space, several structural themes are emerging” which should offer “better alpha-generation opportunities relative to their large-cap peers”, the research firm said in a note.
Credit Suisse said ahead of the union budget 2022, it expects infrastructure, cement, and industrial companies to do better.
Citing its expectation of growth picking up, Credit Suisse listed domestic cyclicals such as private banks and large public sector banks among preferred segments.
Motilal Oswal remains optimistic and expects the Nifty 50 to deliver 12-15% returns in 2022, supported by continuation of economic recovery and strong earnings growth. While the market trend might be volatile in the near term on account of potential risk from the Omicron variant and fragile global cues, in the long run, strong earnings delivery along with positive macroeconomic data would hold the key to drive markets upwards.
“We expect sectors such as IT, telecom, capital goods, cement and real estate to do well in 2022. While banking and auto that have underperformed the market so far, have the potential to turn out the dark horse in 2022.”