JM Fianncial suggests 'buy' on 39 stocks across market caps amid FII sell-off

Amid a relentless which has present eased a spot arsenic per analysts with the full FII outflow astatine a staggering Rs 34,348 crore, JM Financial successful its study dated November 18 stated that Nifty50 is down present astir 11 per cent from its peak.

Amid it of the brokerage's sum universe, 21 per cent of stocks successful the JM Financial sum beingness person fallen much than 30 per cent, 55 per cent of stocks person fallen > 20% and 72 per cent  of the stocks person fallen much than 15%.

We expect a pick-up successful authorities capex and agrarian request successful 2HFY25. Further, with continued SIP flows and hopefully a slowdown successful FII outflows successful the adjacent future, it mightiness not beryllium a atrocious clip to commencement analysing stocks that person fallen steeply from their 52-week highs.

The home brokerage underscored that thehe sell-off successful Indian equities started arsenic a “Sell India, Buy China” commercialized station the Chinese authorities announcing stimulus measures for the system successful Sep’24. FIIs preferred
moving to China (trading astatine little than fractional of India’s valuations. India’s 1-year guardant P/E done Jul’24 to Sep’24 was > 1 modular deviation supra mean). Consequently, China saw FII inflows of USD 96bn successful Sep’24.

Also, the resistance has travel successful amid concerns of Indian listed companies missing connected their Q2FY25 net estimates. 

And amid this, JM Financial inferred that 66 per cent  companies saw EPS cuts for FY25, 45 per cent of the companies saw cuts successful people terms station Q2FY25 and furthernore for FY25, a larger per cent of tiny and midcaps (SMIDs) witnessed EPS cuts (>0%, 3%, 5% and 10%) and larger % of tiny and midcap (SMIDs) saw > 10 per cent EPS cuts.

Moreover, determination is simply a presumption that the FII outflow whitethorn proceed and they whitethorn beryllium compelled to further instrumentality disconnected immoderate of the wealth from the array again to the US. 

"We judge Trump’s plans for little firm taxes, higher import tariffs,and deportation of amerciable immigrants volition effect successful maturation successful the US economy, higher inflation, higher involvement rates and a stronger US dollar. This mightiness tempt FIIs to instrumentality astatine slightest immoderate information of their wealth to the US," added the report.

So, aft the correction the brokerage remains bullish connected the India's structural maturation communicative amid 5 factors specified as:

(1) India is 1 of the fastest increasing economies successful the world;

(2)India’s GFCF arsenic a percent of nominal GDP has risen for 4 years successful succession. It is expected to deed 31.5% successful FY25 (highest astatine 35.8% successful FY08);

(3) India and China volition beryllium the largest manufacturing hubs of the satellite by 2030

(4) India has its largest ever teen and younker population. It volition proceed to person 1 of the youngest populations successful the satellite till 2030;

(5) The Indian markets are supported by home superior flows, with SIP flows of INR 253bn successful Oct’24.

Stocks the brokerage mentions successful its 'buy' database and that person corrected up to 61 per cent from their 52-week high:

Largecap stocks: ONGC, Cholamandalam Investment, Samvardhana Motherson, Shriram Transport, Havells India, Reliance Industries, DLF, Maruti Suzuki, Polycab, JSPL,, Bank of Baroda, Hindalco, Bharat Electronics,and  Axis Bank.