Nifty near 22,000 support: Kotak Neo sees opportunity in large-cap stocks

India’s equity market is trading close to key support levels, offering investors an opportunity to build medium- to long-term portfolios in large-cap companies, Shrikant Chouhan, Head of Equity Research at Kotak Neo, said on Wednesday.

In an exclusive interaction with ANI, Chouhan said that while short-term market movements remain uncertain due to geopolitical developments, current valuations offer opportunities for investors with a long-term perspective.

“We are of the view that the market is very close to its important support levels. 22,000 is something which is acting as major support for the market,” Chouhan said.

He noted that the market’s valuation at 16 times FY28 earnings makes it attractive for investors looking to stay invested over the medium to long term.

“If we consider the multiples of the market, then we are at 16 times to FY28 earnings, which is something we can say really decent in terms of investing with a medium to long-term view. At these levels, we are advising our clients to look for adding large cap companies to their portfolios,” he added.

Chouhan also highlighted the potential in Nifty 50 stocks, stating that nearly 80 per cent of the index’s constituents are trading at least 20 per cent below their fair values.

US-Iran developments cloud short-term outlook

However, he cautioned that short-term market direction would largely depend on geopolitical developments, particularly news flow surrounding the United States and Iran.

“Short term is highly uncertain. It is completely depending upon the overall news flow between US and Iran,” Chouhan said.

Advising investors to focus on companies with strong fundamentals and clear business strategies, he added, “My advice is that keep investing in those companies where the vision is very clear and where the company size is big”.

BFSI, travel, pharma and auto among preferred sectors

On sectoral opportunities amid the ongoing Q2 earnings season, Chouhan said that performance across several key sectors had met or exceeded expectations, creating investment opportunities in select segments.

“Specifically, we are bullish on the BFSI—so banks, NBFCs... capital market themes... travel and tourism space... CDMO space from the pharma sector, and select auto companies because they have corrected sharply,” Chouhan concluded.

Mega IPOs may boost India’s global visibility

Chouhan also shared his views on the potential long-term impact of large initial public offerings (IPOs), including the proposed Jio Platforms offering, on India’s financial markets.

He said that mega IPOs could increase India’s visibility among global investors and strengthen the country’s position in international financial markets, although their immediate impact on market performance may be limited.

“These mega-size IPOs are not going to shape up the future of Indian market in the short term, but in the long run, definitely yes. This type of IPOs actually increases a lot of visibility in the world markets,” Chouhan said.