The S&P BSE Sensex ended down 119 points at 25,960 and Nifty50 ended down 33 points at 7,896.
Both the broader indices outperformed the benchmarks. The BSE Mid-cap index advanced 0.21% or 11,104 and the small-cap index inched up 0.07% at 11,779. BSE Midcap index hit 2 month high since October 2015.
"While the broader market has been consolidating so far in 2015, we are hopeful that the negative traction in earnings growth that has seen in H2FY15 may start reversing sooner or later.
"We continue to be enthused by the improvement in several macro factors including global raw material price, low inflation & a much improved fiscal situation.
The improvement in macro-environment will start reflecting in corporate earnings which ultimately decides market movement," adds Rahul Shah, VP- Equity Advisory, Motilal Oswal Securities.
He further adds, "We see Indian equities will give good 15-20 CAGR for next coming five years, Lower commodity prices, low inflation rates, lower interest rates, improving macro environment, improved government financials are all positive indicators to drive Indian markets.
We are optimistic about the big bang reforms to continue to drive the economic growth in country.
All these factors pretend some interesting times ahead for the Indian equities in 2016. Considering this facts we believe mix of large caps and midcaps will give superior returns".
Among the key mid-cap gainers, Jindal Steel, Adani Power, Tata Global Beverages, Zee Limited and CRISIL were up 3%-4%.
Shares of Petron Engineering Construction surged over 14.25% after the company said it has won a construction order from JSW Cement Ltd.
Shares of SREI Infrastructure Finance were nearly 5% after investors booked profits following sharp gains in the previous session.
SREI Infrastructure Finance had gained sharply in the previous session after France-based BNP Paribas Lease Group acquired shares in SREI Infrastructure Finance against its stake in SREI Equipment Finance Ltd.
Top Picks for 2016
Interglobe Aviation, Bharat Forge, Ashok Leyland, DHFL, Inox Wind, Vinati Organics, Granules India are the top picks of Rahul Shah, Motilal Oswal
Bharat Forge: Bharat Forge has broadened its revenue stream by entering new segments (non-auto) and global markets. The share of auto business has declined from 80% in FY07 to 54% in FY15 and the share of India has reduced from 60% to 40%.
Inox Wind: Inox Wind is India’s fourth-largest WTG manufacturer and provides turnkey solutions for wind farm projects. IWND has relationships with several large utilities, including Tata Power, Continuum Wind, Clean Wind Power (Hero Group), and ReNew Power; and bagged several large sized orders in FY15. Order book as at December 2014 stood at 1,258MW, and cumulative installations / supplies stood at 1,044MW.
Vinati Organics: Vinati Organics (VOL) generates its 88% revenue from its top 3 products i.e. IBB, ATBS and IB. Globally, VOL is the largest player with a 70% market share and deals only in the domestic market. We value VOL at 18x FY 18E EPS of Rs 33.1 with a target price of Rs 595 providing for an upside of 32%.
Ashok Leyland: Management’s focused approach is paying off in a) market share gains, b) rising ASPs, c) controlled cost, d) working capital reduction, e) significant control on capex and f) debt reduction.Strong volume recovery, coupled with weak commodity prices, would drive significant margin expansion and EPS growth going growth.
DHFL: DHFL continues to perform well on growth and asset quality front; we expect the loan growth to remain healthy at a CAGR of 24% over FY16-17 and asset quality remains healthy with +100% provision coverage ratio. Maintain Buy with a price target of Rs 735.
IndiaNivesh Securities
Aurobindo Pharma: We remain positive as there is relatively less regulatory risk and enough scope of earnings upside subject to ANDA approval. We have a buy rating with a price target of Rs 468.
Camlin Fine Sciences: Given the technology led moat in business and ability to expand in various diphenol derivatives, CFSL is well positioned to deliver higher revenue and margin over medium-to-long term. We value CFSL at EV/EBITDA multiple of 13.0x FY17E and arrive at target price of Rs 136 on the stock.
Capital First: Capital First has emerged as a specialized player in financing MSMEs by offering different products for various financing needs. The management continued to deliver robust result quarter over quarter. We continue to like the stock at current levels and we are positive on the company’s long term future prospects. It remains one of the top picks among our NBFCs coverage universe. We continue to maintain ‘BUY’ rating on the stock with price target of Rs 468.
Force Motors: Force Motors net sales is expected to grow at CAGR 21% while the company’s profit is expected to grow at CAGR of 43% for FY15-FY17E. We recommend BUY with target price of Rs 3,780 (based on 24x FY17e earnings).
KPR Mills: We believe that KPR Mills would re?rate due to improving profitability and focus on higher margin garments business. We maintain BUY rating on the stock with SOTP based target price of Rs 1,059.
Majesco: We value Majesco at EV/Sales multiple of 2.4x FY17E and arrived at revised target price of Rs 778 from Rs 704 earlier. Given the 19% upside from TP, we Maintain BUY rating on MJCO.
Nesco: We forecast FY15?17E to see net profit CAGR of 19%, on the back of increase in occupancy levels at their recently commenced IT Building-3. We recommend BUY rating and a revised PT of Rs 1,896 from Rs 1,646 earlier.lier.
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