ETMarkets Survey: IT, pharma, PSUs big no-no for Samvat 2076; big bets on private banks, insurers

This year’s Samvat Survey of ETMarkets.com yielded depressing outcomes, thanks to lackluster equity performance for the Hindu accounting year, but the brokerages who took part in it appeared to have better clarity on where the money is, going into a new Samvat.

Sectoral indices for realty, banking and oil & gas have outpaced the equity benchmarks since last Diwali, while metal, auto and healthcare indices emerged top laggards.

But going into a new Samvat year, private sector banks, insurers and consumption themes like FMCG and consumer durables have emerged favourite bets among a dozen domestic brokerages who took part in the Samvat Survey of ETMarkets.com.


Samvat 2076, the new Hindu accounting year, kicks off on Diwali, October 27.

Most analysts have a clear ‘avoid’ advice on PSUs, metal, IT and pharma stocks.

“We see 10-12 per cent upside in Sensex and Nifty over the next one year. A revival in the domestic economy and its positive fallout on corporate earnings, continued aggressive policy push towards privatization and some semblance of stability globally are three key factors that are expected to drive equity markets in the new Samvat year,” said Gaurav Dua, Senior VP and Head of Capital Market Strategy and Investments at Sharekhan by BNP Paribas.


During Samvat 2075, BSE Realty index surged the most at 14 per cent, followed by Bankex (up 13 per cent), Oil & Gas (up 13 per cent), IT (up 8 per cent), FMCG (up 6 per cent), TECk (up 5.50 per cent), Capital Goods (2 per cent) and Power (up 0.70 per cent) indices. Sensex advanced 11.50 per cent between November 7 last year and October 23 this year.

Among the laggards, BSE Metal (down 29 per cent), Auto (down 14 per cent), Healthcare (down 13 per cent), PSU (down 4 per cent) and Telecom (down 1 per cent) indices underperformed other sectors during the year.

“Metals must be looked at from a cyclical point of view, as they are expected to perform better. Auto is another space which is extremely beaten down and has higher chances of witnessing a revival in the coming quarters,” said Umesh Mehta, Head of Research, Samco Securities.

From among the 14 analysts from across brokerages who took part in the survey, 10 are bullish on private sector banks. Pankaj Bobade, Head of Fundamental Research at Axis Securities, said: “We are quite positive about India’s economic growth over the next year and beyond. Private banks are our top picks. We remain believers of the long-term consumption story, especially the discretionary consumption theme. Rising per capita income above $2,000 per annum augurs well for improved spends on discretionary consumption.”

Market capitalisation of private sector bank has jumped 22 per cent to nearly Rs 18 lakh crore in Samvat 2075, with Kotak Mahindra Bank rallying the most at 44 per cent. It was followed by Bandhan Bank (up 27 per cent), ICICI Bank (up 27 per cent) and HDFC Bank (26 per cent).

Lakshmi Vilas Bank, YES Bank and IDBI Bank slipped 45-80 per cent during this period.

Some brokerages believe chemicals, insurance and asset management companies will do better in Samvat 2076. Jyoti Resins (up 150 per cent), Fine Organic Industries (up 77 per cent) and Vinati Organics (up 42 per cent) have emerged as top gainers in the chemicals space since last Diwali.


On the other hand, HDFC AMC (up 113 per cent), Reliance Nippon (up 84 per cent), SBI Life Insurance (up 70 per cent) and ICICI Lombard General Insurance (up 53 per cent) have emerged among top gainers from the asset management and insurance segments since November 7 last year.

Dua of Sharekhan said corporate-lending private banks, non-lending financials, specialty chemicals and select consumer companies are looking good for next one year.

HDFC Securities said investors can consider consumption-oriented and MNC companies, auto, pharmaceuticals, insurance and asset management companies for Samvat 2076.

Religare Broking, Motilal Oswal Financial Services, Kotak Securities, Karvy Stock Broking had 'avoid' calls on healthcare sector. IIFL advised investors to stay away from PSUs. Indiabulls Ventures, IndiaNivesh and Edelweiss Securities gave thumbs down to the IT sector.