Stock Market Outlook: For a long time, we have been telling you such market analysis which has been extracted on the basis of immense research and experience. Kishore Ostwal, CMD of CNI Research has given his opinion on how the market is going to move ahead and has given his estimate on the further outlook of the stock market.
Opinion of Kishor Ostwal of CNI Research
Marketers and people of Dalal Street are worried about China’s covid crisis and the possibility of lockdown and are also wondering why the Dow Jones of American markets has crossed 34,000. For the first time, we are seeing a trend of weaker Dow futures trading at a premium. The Federal Reserve’s moves are being closely watched by all but it seems that the Fed is favoring the bulls who are holding long positions. Although the Fed has officially announced that it will now slow down rate hikes, I believe that in 2023, the process of rate hikes will stop and rate cuts will begin, after which the Dow Jones all-time-high Can go on. After this, profit booking will start there. In my opinion, Dow will see common settlement after December 16, which will see billions of dollar option expiry. Dow’s next target can be 34632 and the market can continue to grow.
Apart from all this, one more thing is being discussed that the rapid fall in inflation also creates fear of economic recession. Now as far as the fear of economic slowdown is concerned, investors would like to refrain from longing, after which FPIs would like to increase their purchases rapidly as they would be all technical aspects.
How will be the condition of Indian market
Now if we talk about the Indian market, here surprisingly the market has seen strength at the time of expiry and they have been successful in maintaining 1 Nifty above 18,000. Although there is talk everywhere about the boom of the domestic markets, no one wants to bring it down, otherwise it will be difficult to cross the all-time-high level. This will have two benefits- First these FPIs are ready to go long and retail investors will not invest much money. I have been saying for the last six months that in the year 2022 we will see Nifty at all time high and it looks like it will happen soon.
The only disappointing thing can be that if BJP loses in 2 states on 8th December then market may fall and if it wins then upward movement of 300 to 400 points can also be seen. Apart from this, a great performance was seen on this Thursday when Nifty’s December futures closed at 18650 level.
How is the outlook for the metal sector?
As said earlier, if China takes steps to increase its growth rate, then it will be a positive sign for the metal sector. Steel and iron ore will be needed if measures are taken to increase infrastructure. India has also lifted export duty on steel, which will make it easier for steel companies to increase prices. Good movement is also expected to be seen for the shares of metal companies after 8 December 2022. Despite the bad results, Tata Steel’s stock has not broken, due to which it will be interesting to watch this stock. My outlook is quite bullish for the metals sector.
FPI buying will be seen further
FPI buying has been witnessed in November and it is expected to continue in December as well. In the long term, I fully expect Nifty to go up to 37800 and I have been saying this since 2020. However, what will happen after this, nothing can be said on that. Many experts expect Nifty to reach the level of 1 lakh, but I do not have any scientific basis for this. I have made my own system which reads the data which may not be available in readymade software. My study says that there are all reasons for the market to boom.
Kishore Ostwal says that we do not want to tell such stocks which can give 20% return but also give 50% problems. HDFC Bank, Infosys and HDFC Life are classic examples of this. HDFC Bank’s high level has come after 18 months but Infosys is still far away. So it is better to leave such stocks either for institutions or keep them for dividend yield. We can talk a lot about such stocks which are bad and cannot help you grow your money but at CNI Research we talk about such stocks which you should hold for long term and which you should avoid.
That’s why we at CNI Research discuss such stocks which can prove to be value stocks for the clients and later turn into growth stocks. We have already told many times about such stocks which have increased up to 100x, 200x. We prefer to stick to such stocks which are trading at 70 to 90 per cent discount to their fair value.
Some great value stocks
For example, GTV Traders is also priced at Rs 350, which does not justify its market cap of Rs 100 crore and is not a fair price. Its current price is undervalued for its power, food and engineering businesses. Its engineering business alone is worth Rs 400-500 crore. You can compare this with any engineering company that what is the market cap with 100 crore revenue, capital intensive business with high margin and efficiency ratio will be very less. There will be separate valuation of power and food.
Aakar Auto which is with 4 world class plants cannot be valued at only 70-80 crores. This is a stock giving at least 10 times returns. Integra which is an MNC company in engineering, railways, telecommunications and its Japanese parent company looks good with a trade of $ 25 billion.
These shares are running at discount from fair price
Triveni Glass, Alpine Housing, Metal Coatings, Sunil Agro, RR Metals are trading in the range of Rs 15 to 60 crores, which are actually available at a huge discount from the fair price. For example, what is the point of buying Redington which is a company with a market cap of Rs 12000 crores when you can buy MK Exim, a better disciplined company with the same business model with a market cap of only Rs 200 crores. Here you have a chance to create wealth.
Changing perspective will be beneficial
If you want to become a successful investor, then you have to change your attitude. We had first seen Aanchal Ispat at Rs.5 and today this share is at Rs.27 i.e. a direct return of 550%. Can you get such huge returns in any other growth stock? We shifted from Suzlon at Rs 8 to Aanchal Ispat at Rs 14 and the money doubled.
Understand the difference between growth and value stocks
Stock selection should always be your decision because whether it is a microcap stock or a growth stock, the risk is always there. Sometimes growth stocks collapse and come down to zero, so what can be more risky in microcaps than this. For example, the share of Jain Irrigation has come down from Rs 135 to Rs 3 and it is an F&O stock, so can investors save themselves? To put it another way, how much can you buy? For example Vishnu’s share in which when we started buying then at Rs 70 you could buy 30,000 shares for Rs 20 lakh and now you can buy only 1000 shares. So you should have a clear strategy between growth stocks and value stocks. Value stocks can convert into growth stocks but growth stocks cannot convert into super growth stocks.
strong return stock
Whenever an analyst looks at a company, he looks at ROE, ROCE, EPS and PE but does not check its efficiency ratio. That’s why microcaps are always missed. However, when the stock increases by 10 times, they are ready to take it because it fits their criteria. If you want to be successful then invest like a businessman. For example RDB Rasayan has already shown EBITDA of Rs 26 crore in the first half and may cross Rs 55-60 crore for the financial year. Can These Stocks Be Ignored Now? The CNI team had identified this stock at Rs.45. Here we are telling about it because it responds slowly but still you are getting it very cheaply by giving 150% return.
Disclaimer: The market levels and stocks mentioned here are the stocks researched by CNI Research. Be sure to consult your investment advisor before investing. digitnews.in is not responsible for any kind of loss.