Despite the Covid-19 pandemic bringing the economic activity to a halt for nearly 3-months, markets posted their best yearly gains since 2017 in calendar year 2020. The benchmark Sensex and Nifty50 indices surged 16 per cent and 15 per cent, respectively, in the year gone-by, clocking 86 per cent jump from their March lows. In the broader market, the S&P BSE500 gained 20 per cent in CY20 while the S&P BSE Midcap and S&P BSE Small-cap indices rallied 18 per cent and 29 per cent, respectively.
Now the question on every investors' mind remains whether or not the bulls will continue to reign in 2021? According to analysts, market rally in the new calendar year may not be as sharp as seen in recent months as the markets are currently pricing in a lot of positives. ICICI Securities, for instance, expects Nifty50 to hit 14,900 levels in 2021 in a bull-case scenario. However, if market bullishness reverts to average sentiment, the base case fundamental value is around 13,500, which indicates flat returns for CY21.
In such a scenario, which stocks look promising enough to ensure wealth creation in 2021 despite stretched market valuation?
We caught up with Abhimanyu Sofat, Head of Research at IIFL Securities and Ajit Mishra, VP-Research at Religare Broking to identify potential winners.