{"id":16330,"date":"2024-07-22T11:05:24","date_gmt":"2024-07-22T05:35:24","guid":{"rendered":"https:\/\/bigbreakingwire.in\/emkay-global-forecasts-market-correction-highlights-key-avoids-amidst-high-valuations\/"},"modified":"2024-07-22T11:05:24","modified_gmt":"2024-07-22T05:35:24","slug":"emkay-global-forecasts-market-correction-highlights-key-avoids-amidst-high-valuations","status":"publish","type":"post","link":"https:\/\/bigbreakingwire.in\/emkay-global-forecasts-market-correction-highlights-key-avoids-amidst-high-valuations\/","title":{"rendered":"Emkay Global Forecasts Market Correction, Highlights Key Avoids Amidst High Valuations"},"content":{"rendered":"
<\/div>\n

Market Correction Forecast:<\/strong>
\u00a0\u00a0 – Frontline indices are predicted to face a potential correction of 5-10%.
\u00a0\u00a0 – Small- and mid-cap stocks may experience more significant declines.

Emkay Global\u2019s Cautious Stance:<\/strong>
\u00a0\u00a0 – The brokerage has initiated a “key avoids” list due to concerns over inflated valuations.
\u00a0\u00a0 – Nifty valuations are currently high, and the market has already priced in a positive budget.
\u00a0\u00a0 – A lack of favorable market triggers and a tepid Q1FY25 earnings season could prompt a sell-off.
\u00a0\u00a0 – Anticipated rate cuts only by the end of CY24 are expected to add to bearish sentiment.

Valuation Concerns:<\/strong>
\u00a0\u00a0 – The Nifty is approximately 10% above its five-year historical mean, trading at 21.4x 1YF PER.
\u00a0\u00a0 – NSE Midcap 150 and NSE Smallcap 250 valuations are 52.5% and 35.5% above their respective five-year averages.
\u00a0\u00a0 – Even with strong growth prospects, current valuations suggest potential for a near-term correction.
\u00a0\u00a0 – Significant upward revisions in forward estimates would be needed to justify such high multiples, which are not expected in the next 1-2 quarters.

Sectors and Stocks at Risk:<\/strong>
\u00a0\u00a0 – Industrials: Likely to lead the correction due to high valuations.
\u00a0\u00a0 – Financials: Most liquid and also expected to experience a downturn. Emkay’s underweight stance is reflected in its views on HDFC Bank and SBI Cards, anticipating a derating for both.
\u00a0\u00a0 – Durables, especially Autos: Also vulnerable to declines.<\/p>\n\n\n\n

Sectors to “Hide” In:<\/strong>
\u00a0\u00a0 – Staples
\u00a0\u00a0 – Energy
\u00a0\u00a0 – Technology (in that order of preference)

Stocks Added to “Key Avoids” List:<\/strong>
\u00a0\u00a0 – Eicher: Due to concerns over product positioning and high valuations.
\u00a0\u00a0 – L&T Technology Services: Considered overvalued compared to other large-cap IT services companies, with expectations of a weak FY25.
\u00a0\u00a0 – PI Industries: Valuation is not yet justified by its projected sub-5% EPS growth for FY25\/FY26.

Long-Term Outlook:<\/strong>
\u00a0\u00a0 – Despite the anticipated sell-off, Emkay Global remains positive on India’s long-term prospects.
\u00a0\u00a0 – The brokerage plans to increase its market exposure following a meaningful correction.<\/p>\n","protected":false},"excerpt":{"rendered":"

Market Correction Forecast:\u00a0\u00a0 – Frontline indices are predicted to face a potential correction of 5-10%.\u00a0\u00a0 – Small- and mid-cap stocks may experience more significant declines.…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[618,616,619],"tags":[4508,850,4512,4514,4515,2267,4511,4509,4513,4510],"class_list":["post-16330","post","type-post","status-publish","format-standard","hentry","category-brokerage-reports","category-stock-in-news","category-stocks-in-news","tag-emkay-global","tag-financials","tag-industrials","tag-investment-strategy","tag-long-term-outlook","tag-market-correction","tag-mid-cap-stocks","tag-nifty-valuations","tag-sectors-to-avoid","tag-small-cap-stocks","entry","rows"],"jetpack_publicize_connections":[],"modified_by":null,"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pfgCxS-4fo","jetpack_sharing_enabled":true,"jetpack_likes_enabled":false,"_links":{"self":[{"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/posts\/16330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/comments?post=16330"}],"version-history":[{"count":0,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/posts\/16330\/revisions"}],"wp:attachment":[{"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/media?parent=16330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/categories?post=16330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/tags?post=16330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}