Brokerages expand stock coverage post market correction; Jefferies, Nomura, Morgan Stanley lead

As analysts find new investment prospects, the recent market correction has spurred a boom in stock coverage by big brokerage houses. Leading companies including Jefferies India, JM Financial, Morgan Stanley, and Nomura have broadened their research horizon and started coverage on several stocks in different sectors.

A nearly 10 per cent decline in benchmark indices since last September has produced appealing valuations, which have drawn institutional investors and retail players looking at fresh stock ideas. Brokerages are therefore stressing possible market cycle winners for the next one.

Leading new coverage are Jefferies and JM Financial.

With strong returns anticipated over the next year, Jefferies India, one of the most active companies in launching coverage, has set its sights on Patanjali India, Waaree Energies, Sai Life Sciences, and Swiggy. In a similar vein, JM Financial has begun to cover Tata Communications, Bazaar Style Retail, Sagility, and IKS Health, with a favourable opinion of the majority.

Other well-known brokerage houses are following suit. Dr Agarwal's Health and Bharti Hexacom were covered by Motilal Oswal Financial Services, followed by Adani Green Energy by Macquarie, Afcons Infrastructure by Nuvama, ITC Hotels by Ambit, and Hyundai Motors India by Nirmal Bang.

Valuations 

Improved valuations are attracting the attention of foreign institutional investors (FIIs), who had been net sellers for months. Market dynamics have changed as a result of the recent correction, which was fueled by high valuations, worries about earnings, and tensions over international trade. Analysts have begun covering stocks that are anticipated to gain from the economic recovery, indicating that this correction has created long-term investment opportunities.

Investors Seek Guidance Amid Market Shift

Retail investors have persevered in the face of the market decline. According to analysts, investors are actively seeking growth-oriented themes with significant earnings potential, especially those with cash on hand. Many people expect positive surprises from the upcoming fourth-quarter results season, which will further improve investor sentiment.

News Market Leaders Set to Emerge

Analysts anticipate a change in leadership as markets level off, with new industries and stocks gaining prominence. Companies that exhibit steady earnings growth and solid fundamentals are now the main focus. In the upcoming months, new coverage is anticipated to influence long-term investment strategies as the overall markets continue to recover.