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10 Largecaps Stocks To Lead Bulls Charge

October 03, 2023 09:40 IST

These stocks offer the best combination of maximum 'buy' recommendations from brokerages and share price upside over the next 12 months.

Illustration: Uttam Ghosh/Rediff.com
 

Largecaps are currently trading at a valuation discount to mid and smallcap stocks and this has made them attractive.

Krishna Kant and Ram Prasad Sahu/Business Standard look at 10 stocks from the Nifty50 or Nifty Next 50 baskets, based on brokerage recommendation and share price upside over the next 12 months, that potentially could lead the rally in largecaps when the tide turns.

Largecap stocks have grossly underperformed the broader market in the past year.

The benchmark NSE Nifty50 is up 17.5 per cent in the past 12 months, against a 30 per cent rally in the Nifty MidCap 150 and nearly a 33 per cent rise in the Nifty SmallCap 250 during the period under review.

This has resulted in a relatively poor showing by leading stocks that are part of the Nifty50 and Nifty Next 50 indices as compared to the mid and smallcap stocks.

This underperformance has also resulted in largecap stocks trading at a valuation discount to mid and smallcap stocks, which is unusual.

For example, the Nifty50 index is valued at a trailing price-to-earnings (P/E) multiple of 22.74x, a nearly 13 per cent discount to the Nifty MidCap 150 index's P/E of 26.14x.

Similarly, the benchmark index is trading at a nearly 9 per cent discount to the Nifty SmallCap 250's trailing P/E of 24.7x, according to NSE data.

This has made largecaps more attractive compared to mid and smallcap stocks.

Historically, the rally in mid and smallcap stocks and that in largecap stocks follows a cycle and it's a matter of time when largecap stocks will once again start outperforming the broader market.

Here are 10 largecap stocks that are likely to be the rally leaders.

The selection is based on the 12-month forward price target of brokerages of the 100 stocks that are either part of the Nifty50 or Nifty Next 50 indices.

These stocks offer the best combination of maximum 'buy' recommendations from brokerages and share price upside over the next 12 months.

Life Insurance Corporation of India

Godrej Consumer Products

Bharat Petroleum Corporation

HDFC Bank

State Bank of India

InterGlobe Aviation (IndiGo)

PI Industries

Samvardhana Motherson International

UPL

Hindustan Unilever


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Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.

Feature Presentation: Aslam Hunani/Rediff.com

Krishna Kant, Ram Prasad Sahu
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