The sell-off in mid and small-cap stocks is primarily driven by concerns over high valuations, profit booking by investors after a strong rally, and increased regulatory scrutiny on speculative trading.
Mid and Small Cap fall from its 52-week High
The Nifty Mid-cap 150 Index has fallen over 17.40 percent from its 52-week High of Rs. 22,515 to Rs. 18,590 and the NIfty Small-cap 250 Index has fallen 22 percent from its 52-week high of 18,688 to Rs. 14,505.
Reasons for Market Decline
The Indian stock markets have been under pressure due to continuous selling by Foreign Institutional Investors (FIIs). One of the key reasons is the strengthening of the US dollar, which makes emerging markets less attractive. Additionally, concerns over a slowdown in corporate earnings growth, global economic uncertainties, and high valuations of Indian stocks compared to other emerging markets have further contributed to the market decline.
Motilal Oswal recommends two stocks with up to 70% upside
- PN Gadil Jewellers – Motilal has given a Target of Rs 950, which translates to a 70 percent upside from current levels of Rs. 560. It believes strong revenue growth and the expansion strategy with margin expansion will be positive for the stock.
- Federal bank – Motilal has given a Target of Rs. 225, which translates to a 24.30 percent upside from current levels of Rs.181. It believes the company’s focus on high-yielding loans with strong financial growth outlooks and digital transformation will be positive for the stock.
Jefferies recommends several stocks with up to 45% upside
- HDFC AMC – Brokerage has given a target of Rs 4,900 indicating an Upside of 28.27 percent from current levels of Rs. 3,820.
- Crompton Greaves – Brokerage has given a target of Rs. 480 indicating an Upside of 45 percent from current levels of Rs. 331
- Aptus Value Housing – Brokerage has given a target of Rs. 420 indicating an Upside of 40 percent from current levels of Rs. 300
- Syrma SGS Technologies – Brokerage has given a target of Rs. 690 indicating an Upside of 58.62 percent from current levels of Rs. 435.
Written By Abhishek Das
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