Investment in market leaders with a safety-first approach could yield reasonable returns across sectors.
Ram Prasad Sahu and Hamsini Karthik report.<\/strong><\/p>\n

A sharp recovery, after the fall in March, helped benchmark indices post their second consecutive double-digit growth of 15 per cent in 2020.<\/p>\n

While defensives such as health care and information technology sectors dominated the returns charts, growth became more broad-based towards the second half with cyclicals, too, catching investor attention.<\/p>\n

It was not just growth across sectors but down the market capitalisation ladder as well.<\/p>\n

After their underperformance over the past couple of years, small and mid cap indices did better than the benchmarks with returns over 20 per cent for the year.<\/p>\n

Going ahead, the Street expects strong economic recovery, which is expected to rub off on earnings growth.<\/p>\n

In addition to a positive outlook on IT and pharma, analysts expect cyclicals and infrastructure sectors to do well as the capex cycle and investment by the government picks up.<\/p>\n

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While fund flows continue to be strong, given the sharp rally, investors will have to keep the valuations factor in mind.<\/p>\n

With Nifty now trading at 23 per cent premium to the 10-year average, brokerages stress on the need to be selective in the year ahead.<\/p>\n

With larger companies gaining market share and the trend expected to be maintained, investment in market leaders with a safety-first approach could yield reasonable returns across sectors.<\/p>\n

Also, given multiple levers at their disposal, market leaders are in a better position to absorb the rise in input costs and push up volumes or pass it on to protect margins.<\/p>\n

In addition to the most-recommended large caps, we also highlight a few small-caps and mid-caps brokerages included in the portfolios for 2021 due to high growth expectations and attractive valuations.<\/p>\n

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YTD: Year to date, P\/E is price-to-earnings ratio; Data as of December 31, 2020 and compiled by BS Research Bureau; source: Bloomberg estimates, stock picks sourced from ICICI Securities, Angel Broking, HDFC Securities, Credit Suisse, Axis Securities, Nomura, Reliance Securities, BNP Paribas, IIFL Securities, Bernstein, and Motilal Oswal Financial Services; for ICICI Bank, revenue indicates net total income<\/em><\/p>\n

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• MONEY TIPS<\/strong><\/li>\n<\/ul>\n

  Feature Presentation: Aslam Hunani\/Rediff.com<\/em><\/strong><\/p>\n

  Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

  Investment in market leaders with a safety-first approach could yield reasonable returns across sectors.Ram Prasad Sahu and Hamsini Karthik report. A sharp recovery, after the […]<\/p>\n","protected":false},"author":3,"featured_media":105081,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"\n