Stocks driving economic recovery may return up to 50% despite being pricey

Mumbai: Rich valuations have been a worry for stock investors, but analysts claim there is still steam left in various pockets of the market.

In the NSE500 index, 180 stocks could return between 10% and 50% over the next 12 months, according to Bloomberg’s consensus estimates of companies. 

“Valuation comfort is still left in some pockets which expected to drive economic recovery.

 “Consensus fundamental price targets are indicating that cyclical.

Capital-intensive defensive space – commodities, financials, utilities, healthcare. Media, select materials and telecom has upside potential despite peak valuations.”

“With no major incremental supply from the US and Europe in the next one year and increased cost.

Due to higher energy prices and decarbonisation, world steel prices will remain elevated compared to historical average.

Aand Indian producers are in a better position with relatively lower risk of a sharp fall in steel prices.

Boost Invester Sentiments

Significant earnings upgrades are likely to provide respite to cagey investors, as stock valuations hover near historic highs.

In terms of equity flows, India is showing remarkable resilience despite high valuations.Hence, concerns are emerging on the cost side.

There is a possibility in the upcoming quarter, we may continue to see margin pressures.

Nevertheless, recent announce by the government on the telecom, banking and auto sectors are favourable and will likely boost investor sentiments

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