“Returns are likely to be back loaded given the tough global backdrop and political uncertainty as the election approaches in 2Q24,” said Goldman Sachs’ analysts, including Sunil Koul, in the firm’s 2024 equity outlook note.
The brokerage suggests short-dated Nifty puts for investors looking to hedge any election-related volatility citing inexpensive pricing.
Large-cap stocks like HDFC Bank, Kotak Mahindra Bank, Godrej Consumer Products, Dabur India, Pidilite Industries, ICICI Bank, and Marico are among Goldman’s top picks.
The firm said the price-to-earnings (PE) ratio of MSCI India at slightly below 20 times is 12% lower than the valuation seen a year ago at 23 times.
“While the external macro backdrop of high for longer rates, persistent dollar strength, lower China growth and greater geopolitical uncertainty, could potentially lead to elevated market volatility in the region, India is relatively less sensitive to these external shocks,” said the brokerage.
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