Mumbai: Kotak Institutional Equities’ fair value estimates of 50 stocks of Nifty shows only six stocks could return more than 10% from current levels. These include State Bank of India, SBI Life Insurance, ICICI Bank, Infosys, Adani Enterprises and HDFC Life Insurance.
The brokerage said while most sectors are overvalued, valuations are ‘somewhat’ reasonable only in large-cap banks.
“The risk of de-rating is on the lower side for banks, while it seems very high for most other sectors,” said Kotak’s analysts including Sanjeev Prasad, Anindya Bhowmik and Sunita Baldawa in a note to clients.
The brokerage’s fair value estimates for other Nifty stocks such as UltraTech Cement, Eicher Motors, Divi’s Labs, Bajaj Auto, Coal India and L&T are 23% to 31% below their current levels.
In the case of Tata Motors, Maruti Suzuki, NTPC, Hero Motocorp, Tata Consumer Products, Hindalco Industries, BPCL, Asian Paints, Britannia Industries and Titan Company, its fair value forecasts are 10% to 20% below Monday’s closing.
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