The Market Podcast | See Nifty above 11000 by March 2021, bet on large & midcaps: Amit Shah of BNP Paribas

If the last six months belong to bears then the next six months are likely to be dominated by the bulls, Amit Shah - Head of India Equity Research - BNP Paribas said in ‘The Market Podcast’ with Moneycontrol.

The major worry for investors in the next six months will continue to be COVID-19, but selective money-making opportunities will be available in the large& midcap space, added Shah.

The trajectory of the pandemic as well as earnings will guide market movement in the next 6-12 months. “More than the earnings, the market will look for cues in the commentary from companies and earnings outlook for FY22,” he added.

“We believe March -21 fair value to be in the range of 9600 – 11100, depending on how far the lockdowns get extended. As highlighted earlier, this does indicate that the worse is behind us,” says Shah.

Commenting on the money-making opportunities, Shah is of the view that selective large-caps will hog the limelight. These are the second rung of the large-caps which BNP calls them quality laggards will gain traction.

Quality laggards are those companies which have got materially impacted due to COVID, but the fundamentals are there to pull them through the crisis, explains Shah.

They are the ones who take the biggest earnings hit but will bounce back when things open up, he said. Additionally, those companies would also exhibit qualities of free cash flow, higher dividend yield, etc.

In the near term, we have seen mid-caps outperforming the Nifty on a daily basis. The initial route of money will go to select large-caps and mid-caps.(Tune in to the podcast for more)  

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