homemarket NewsTop Picks For 2024: Here's what Jefferies, Citi and Bernstein recommend for the new year
Top Picks For 2024: Here's what Jefferies, Citi and Bernstein recommend for the new year
Most of the brokerages find better value in largecap stocks considering the rally witnessed in mid and smallcaps.
Indian markets had a stellar run in 2023 with the Nifty 50 index gaining 20% and marking its eighth straight year of positive returns. Broader markets were bigger outperformers with the Midcap index going up by 45% and the Smallcap index rallying 55% for the year.
Brokerages like Citi, Bernstein and Jefferies have come out with their strategy to play the markets in the new year. Most of the brokerages find better value in large-cap stocks considering the rally witnessed in mid and small-caps.
Jefferies
Jefferies believes that the foreign investor position in India is light and 2024 should see greater inflows, thereby aiding banking stocks. Among sectors, Jefferies prefers domestic cyclicals like banks, power, telecom, industrials and real estate.
The brokerage is underweight on IT, consumer and energy sectors. Jefferies has increased its underweight positions on the consumer space while raising banks to overweight. It has also trimmed its weightage in Larsen & Toubro and Adani Ports.
Among the key large-cap picks, Jefferies highlights Axis Bank and ICICI Bank, Macrotech Developers, Godrej Properties, Coal India, JSW Energy, TVS Motor and Eicher Motors, Bharti Airtel, Adani Ports and Kajaria Ceramics.
Bernstein
Brokerage firm Bernstein has downgraded the small and midcap stocks to underweight relative to the Nifty 50, given the inability to justify the valuations of most of these names.
A key overweight call from Bernstein is on financials. However, the bigger call is that Bernstein has upgraded IT services within tech to overweight and downgraded consumer tech to an equal weight.
Further, it has also upgraded the telecom sector to an "overweight" and Metals to "equal-weight."
Real Estate and Cement sectors have been downgraded to equal-weight despite the brokerage being positive on their respective cycles.
Citi
The Midcap performance is likely to continue courtesy of the strong domestic inflows in the broader markets, according to Citi. Despite this, the brokerage finds better risk-reward in large-cap companies.
Citi is overweight on PSU Utilities, defence, industrials, banks and insurance but for the large-cap names. At the same time, it is underweight on sectors like Metals and IT.
For the new year, the brokerage has highlighted five contrarian picks - HDFC Bank, Cipla, Devyani International, Indus Towers and Endurance Technologies.
(Edited by : Hormaz Fatakia)
First Published: Jan 2, 2024 9:51 AM IST
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