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"Gold looks on a better footing. It has delivered great return like equity, but we will have to realise whether we will be able to liquidate gold or not," says Nilesh Shah, MD, Kotak AMC.Gold and Nifty have given similar returns. I mean, why are we doing so much of analysis every day? So much of volatility. We look at macro, we look at rupee, we look at earnings, we look at PE. Life is so simple. Just buy gold, forget it.Nilesh Shah: So, we will have to figure out when Indians decide to sell gold, who will buy. Today, gold prices are up because we are one of the largest buyer. Fortunately, for India, central banks of the world have become like our housewives. They have realised that keeping money in dollar, yen, euro, renminbi, securities is risky, as Russian central bankers have realised. Now they have joined the bandwagon and they are buying gold as much as Indian housewives are buying. So, yes, undoubtedly, gold looks on a better footing. It has delivered great return like equity, but we will have to realise whether we will be able to liquidate gold or not. Now, the point is, where do you go from here? I mean, we always talk about equity markets, but let us first understand where is the earnings and economy headed and is it now time to be optimistic because the macro, the data points in terms of tax collections, oil, dollar index, the macro is getting better now.Nilesh Shah: So, it is not about macro going down or earnings not growing. It is all about meeting expectation. At 22 times forward, earnings expectations were running in double digit. Actual earnings came at low-single digit, mid-single digit. In every quarter of this year, Nifty 50 earning per share is more than Rs 250 per share. Overall, we are on our way to achieve 1030 Nifty EPS. The growth is likely to be mid-single digit over last year and that was below expectation, which is why correction has set in. Now, expectations are low and there are reasonably good chances with good monsoon and improving domestic macros, we should be able to get somewhere around 1150 EPS for Nifty 50 next year. It is the earnings growth ahead of expectation which will drive the market upwards. So, what should be our approach now, stay with the market or sell the market on every uptick?Nilesh Shah: So, in the short-term market is like a machine. Money flow determines prices. In the long-term market is like weighing machine. Fundamentals determine prices. As of today, FPIs are seller. They have been selling quite consistently, quite aggressively, their side is well known. No one is going to give easy exit to them by taking market up. If they are selling, market will continue to fall. As their selling stops, market will bottom up. And as their buying starts, markets will start rising. Undoubtedly over longer-term fundamentals will play. This is fair value market where largecaps are below historical average. Mid and smallcap are still around historical average. So, you should maintain neutral weight to equity. Give preference to quality over momentum. Give preference to high floating stock market determined prices versus low floating stock kind of manipulated prices and go for reasonable valuation over expensive valuation. Be overweight largecap as small and midcaps are still trading at premium to historical average. Most importantly, do not buy everything in correction at one go. Keep on adding on a calibrated basis as FPIs are likely to sell for the near term. But when you talk about largecap and when you talk about the large exposure on the markets, it has to be the banking space. So, is that the space that you would advise one to look at very closely given the fact that the valuations now are at a reasonable level and you have seen persistent selling in that space as well?Nilesh Shah: Undoubtedly. The FPI selling in the banking and financial services space has resulted into valuations now trading way below historical average for many of the private banks. The NPA cycle is under control. RBI is improving liquidity which will push up deposit as well as credit growth and barring banks which have exposure to microfinance/unsecured personal lending, rest of the banking system seems to be in a better position. So, undoubtedly banking and financial services is one sector where one can look to add during this correction. The second space where we are bullish is consumer discretionary space. In the budget about one lakh crore tax rebate is given to taxpayers. Eighth pay commission should put money in the pockets of government employees towards the beginning of next year. Both these two things will be positive for consumer discretionary. We do not expect this class to spend money on roti, kapra, makaan, the basic necessities. We expect them to spend money on experiences like travelling, like tourism, like QSR, like education, like healthcare, like premium brands. So, consumer discretionary space is something which looks interesting apart from banking and financial services. As a house you have been bullish on cement. As a house, you have been bullish on IT and consumer you have already outlined. Let us stay with IT. IT stocks have corrected 15% to 20%, some stocks are down about 30%. Why have IT stocks corrected and after the correction, are they a buy now?Nilesh Shah: So, again, in IT stocks, it is all about expectation. There was fear that US might be slowing down. The Google searches on US recession has increased. So, we are probably looking at hard landing as well, that is direct impact on IT business. The second challenge is of technology. There are many IT companies which have significant exposure to BPO and clearly AI chatbot are taking over BPO jobs. Even programming is not far off and there are worries that AI related programming could take away many of the programming jobs. Undoubtedly, in IT, there will be two kinds of companies, one which leverages AI to deliver better, cheaper, faster solution to customers. Now, if you are a large behemoth, to turn around the tanker is likely to be a bit difficult, but to turn around a speedboat might be easy. We have been bullish, mid and small IT companies which are leveraging artificial intelligence, which has limited or no exposure to BPO, and we believe these companies should be able to gain market share as they provide better, cheaper, faster solutions to their customers. The companies which are investing in developing AI related ecosystem, as many of the companies will develop their small learning modules, small language models, SLMs, they will also create an ecosystem which is closed loop and this opportunity could be as big as IT services industry. So, one will have to become bottom-up in stock picking in IT services.

Benchmark BSE Sensex rebounded by 341 points on Monday, snapping its five-day losing streak following buying in banking stocks and a sharp rally in global shares.Stocks that were in focus include names like HAL, which rose 1.3% and BEL, which declined 0.06% and KPIT Tech, whose shares gained 3.2% on Monday.Here's what Viral Chheda, Sr Analyst and SSJ Finance and Securities, recommends investors should do with these stocks when the market resumes trading today.HALAfter making an all time high around 5618 in July 2024, stock has witnessed a Bear Run to make the low of 3045 odd levels. Price has given almost 46% downside move from its higher level of 5618 odd levels as bears were having upper hand over price.From the low of 3045 price has given some pull back and for the past few days moving above 20 DMA of 3365, we can see further upside from here. Moving above 3540 odd levels, further upside can be seen till 3800-4200. For the long term stock looks good and can be bought at every dip.The Stochastics Oscillator is moving in an upward trend along with an increase in volume indicating further upside move with limited downside risk. Hence one can buy at current level and more at dips of 3200 with stop loss of 3000 on weekly closing basis and upside can be seen till 4000-4500 in the coming 10-12 months.BELAfter making an all time high around 336 in July 2024, stock has given a sharp correction to make the low of 239 odd levels. Stock has given almost 29% downside move from its higher level of 336 odd levels as sellers were having full control over the price.After making double bottom around 239 price has given some upside move and currently trading around 280 odd levels. Price is currently facing resistance of 200 DMA around 290, once this level is taken out and it is closed above this level we can see sharp upside move till 330-350. For the long term stock looks good and can be bought at every dip.The Stochastics Oscillator is moving in an upward trend along with an increase in volume indicating further upside move with limited downside risk. Hence one can buy at current level and more at dips of 255 with stop loss of 235 on weekly closing basis and upside can be seen till 330-380 in the coming 10-12 months.KPIT TechAfter making multiple tops around 1920 in July 2024 price has given a sharp correction to make the low of 1142 odd levels. Price has given almost 40% downside move from its higher level of 1920 odd levels. Price is currently trading at its 52 weeks lower level and has made Lower Top Lower Bottom Channel.The price has made the low in their previous support zone and gave some pull back to move around 1250 odd levels. Price is currently moving in the range of 1140-1340, breakout from this range would give further 200-300 points move. Above 1340 odd levels, there would be a change in trend of the stock to upward trend. For the Long term stock looks good and can be bought at every dips.The stochastics oscillator is moving in the neutral zone along with an increase in volume indicating further upside from here. Hence one can buy at current level and more at dips of 1140 with stop loss of 1050 on weekly closing basis and upside can be seen till 1500-1700 in the coming 10-12 months.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

A look at some of the latest stock recommendations by analysts. These stocks are expected to return between 27% and 72% as per analysts’ price targets. TATA MOTORS BROKERAGE: HSBC Price Target: Rs 840 CMP: Rs 661 Upside: 27% Upgrade to buy; valuation looks reasonable after de-rating in the past three quarters Subsidiary JLR achieving fourth- quarter guidance—a re-rating trigger for stock Reduction in discounts, warrants cost in JLR and recovery in small commercial vehicle business key triggers for margin expansionVARUN BEVERAGES BROKERAGE: JM FINANCIAL Price Target: Rs 675 CMP: Rs 507 Upside: 33% Recent stock price decline overdone, and recent pessimism an entry point for long-term investors Superior execution, large opportunity size and net debt-free status provide confidence on earnings growth Current Price to Earnings (PE) ratio of 42 times estimated CY26 earnings still attractive considering the company's growth profile; better than FMCG peersKIRLOSKAR OIL ENGINES BROKERAGE: MOTILAL OSWAL Price Target: Rs 1,150 CMP: Rs 668 Upside: 72% Current stock price factoring in extreme pessimism related to growth and margins Stock price factoring in a bear case scenario of low growth and low valuation multiples of 20 times for the core business Demand slowdown, competitive intensity, higher costs for the B2C division, risk of further fund infusion into group firm Arka Fincap are the key risks

Mumbai: Bajaj Finserv has signed a binding agreement to acquire Allianz SE’s 26% stake in its life and general insurance ventures for ₹24,180 crore, ending a 24-year-old partnership.The buyout, priced at ₹13,780 crore for Bajaj Allianz General Insurance Company and ₹10,400 crore for Bajaj Allianz Life Insurance Company, will take the Bajaj Group’s holding from 74% to full ownership, the company said in a stock exchange filing on Monday.Allianz said it will explore “reinvestment of sale proceeds into potential new opportunities in India.” The deal, subject to approvals from Competition Commission of India and insurance regulator IRDA, may see Allianz receiving proceeds in multiple tranches.Under the structure, Bajaj Finserv will acquire 1.01% in each company, while promoter entities Bajaj Holdings & Investment and Jamnalal Sons will acquire the remaining.Both Cos to Independently Pursue Insurance Strategies Bajaj Finserv will purchase 1,113,295 general insurance shares at ₹4,808.24 per share and 1,522,161 life insurance shares at ₹2,654.12 per share.Following the acquisition, Bajaj Finserv will hold 75.01% of the total equity in both the insurance ventures. Bajaj Holdings & Investment and Jamnalal Sons will acquire 19.95% and 5.04%, respectively, bringing their collective stake to 24.99%, resulting in full ownership of both insurance companies by Bajaj Finserv and its promoter entities.After the termination of the joint ventures under the share purchase agreement, the Bajaj Group and Allianz plan to independently pursue their insurance strategies in India. “As the proceeds become available, Allianz will consider options for their deployment that support the company’s strategic ambitions, in particular the reinvestment of sale proceeds into potential new opportunities in India,” the company said in a release.Once the first tranche of at least 6.1% stake sale is completed, Allianz will shift from promoter to investor, marking the end of a long-standing partnership.“Together with Allianz, we have built two of the strongest insurance companies in India, with a combined premium exceeding ₹40,000 crore, while maintaining industry-best solvency margins,” said Sanjiv Bajaj, chairman and managing director of Bajaj Finserv. “Given the advantage of a single ownership in both companies, we are confident the acquisition will become a big driver of value for our stakeholders in the years to come.”In addition to Allianz’s stake in the insurance JVs, Bajaj will acquire the former’s entire 50% stake in Bajaj Allianz Financial Distributors for up to ₹12.5 crore.In FY24, Bajaj Allianz General Insurance reported a 33% growth in gross written premium to ₹20,630 crore, increasing its market share to 7.3%, from 6.4% in FY23. Despite a NATCAT (natural catastrophe) loss of ₹118 crore (before tax), profit after tax grew 15% to ₹1,550 crore and it maintained a combined ratio of 99.9. The insurer had a solvency ratio of 349%.At the same time, Bajaj Allianz Life Insurance’s individual rated new business premium rose 21% to Rs 6,326 crore, increasing its market share to 5.8%, from 5.0% in FY23. With an AUM of ₹1,09,829 crore, the firm recorded a solvency ratio of 432%.