Russia-Ukraine war has left the stock markets across the world guessing about the severity of the conflict on the equity markets in current scenario. In the worst fall since March 2020, the Sensex tanked by 2700 points, while the Nifty slipped below 16,300 as Russia invaded Ukraine on Thursday.  

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Offsetting some of the losses, the Indian equity benchmarks have already started the recovery with the Sensex surging around 1600 points and the Nifty50 reclaiming 16,700, buoyed by auto, banking and metal stocks, around 11 am on Friday.  

A majority of stock market analysts and experts view this situation as an opportunity to employ 'buy on dips' strategy in blue-chip fundamentally sound stocks and stay invested in the markets as long-term view of the Indian market remains intact. While agreeing, long-term investors need not worry, some of the analysts suggested wait and watch strategy too.  

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Besides the Ukraine crisis, there will be other factors, including expected Fed rate hike and inflationary pressure on the Indian market due to rising crude price among others, that would cause volatility in the markets going forward in March.  

"We are in a structural bull market like 2003-2007" 

"We are in a structural bull market like 2003-2007 and there were 3 corrections of more than 30% in the last bull run. We are seeing the first meaningful correction in the market. Long-term investors should not panic because it is just taking out weak hands before resuming its up move.  This correction will provide a good buying opportunity where major wealth can be created in the next 3-5 years," says Santosh Meena, Head of Research, Swastika Investmart Ltd. 

"Correction was due where geopolitical tension has become an excuse" 

Parth Nyati, Founder, Tradingo, is of the view that correction was due where geopolitical tension has become an excuse for this correction.  

"Inflation and rising interest rates are the major concerns for equity markets and geopolitical tension is increasing the risk of inflation as energy prices are rising. Long-term investors should not panic and look for buying opportunities from lower levels where the domestic economy facing sectors like capital goods, infrastructure, real estate, financials should be on investors' radar," said Nyati. 

A wait and watch strategy

Agreeing that long term investors should not read much into the recent fall, Ravi Singhal, Vice-Chairman, GCL Securities, says market may continue to show volatility, hence investors should wait and watch. "It is not time for new investment but one should hold their portfolio and not sell in panic," he adds.  

Likewise, Ravi Singh, Vice- President and Head of Research- Shareindia, says Nifty may touch the level of 15500 in this scenario. "It is advisable that all investors should follow a wait and watch strategy and avoid any fresh entry at the current juncture. Long term investors having an investment horizon of 3-5 years will get a good opportunity to avert their portfolio, once the global situation stabilizes," he adds.   

Having said all of that, it is to be noted that the market would provide opportunities in fundamentally good stocks that have seen huge corrections and can be considered for buying in the falling market.  

Vinod Nair, Head of Research at Geojit Financial Services, lists five such stocks where investors can explore opportunities in the current dip.   

1. Tech Mahindra 

Communication vertical is a major revenue contributor and expects it to be the growth driver for the company. The vertical is expected to grow at a strong pace driven by 5G. Tech Mahindra is also focusing on latest tech buzzwords like NFT, Metaverse, Web 3.0 etc. We believe the current margin pressure to offset by cost control initiatives taken by the management and further supported by a strong pace of deal wins. Amid global crisis, we believe the growth in digital economy and need for high-speed internet is imminent going forward and expect the company will be major beneficiary 

2. HUL 

We are positive on HUL considering its pricing power, distribution expansion and product innovation initiatives. Barring short-term pressure on margins due to input cost inflation, demand to be resilient aided by and GoI’s initiatives to revive the economy, higher MSPs, good monsoon & sowing. Calibrated price hikes, operational efficiency, and improvement in product mix due to re-opening of markets will help to reduce margin pressure. Currently, HUL is trading below its historical average and sees a strong upside from the current level once the market stabilises.   

3. HDFC Bank 

After its underperformance during the last year, the banking sector is expected to display a comeback with improved asset quality, coverage ratios and strong liquidity. HDFC Bank, being the top private bank, has been outshining the industry with consistent growth and attractive asset quality. With a positive credit growth outlook, improved balance sheet and well-positioned brand name, we believe that the growth momentum will continue in the coming quarters. Currently, the stock is available below its 3-year average and hence we see strong upside potential from the current levels.  

4. Biocon 

Entry into the vaccine space, strong demand, new product launches, focus shifting towards commercializing and increase in API facilities in generics should support long-term growth prospects for the company. Since Biocon has a strong presence in the domestic and developed markets, we believe that the company will end this fiscal year on a strong growth trajectory, and we expect earnings to grow at 32.8% CAGR over FY21-24E. Hence, we reiterate our BUY rating on the stock as the stock is trading at its 5 yr. historical avg. 

5. Tata Power 

Tata Power is well focused on utilizing technology to achieve operational excellence and offer green energy solutions. The company plans to incur a capex of Rs. 34bn over the next 18 months to increase cell and module manufacturing capacity by 4GW each. Strong execution, increased order wins in the solar business and increased revenue in other segments are the key factors that will drive revenue in the medium-term. With a positive outlook, I recommend to accumulate at downside as the stock is likely to trade in premium owing to Govt.’s thrust for alternative power. 

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)