Stocks to buy: Many stocks with strong fundamentals now available at attractive valuations, thanks to market corrections; HDFC Securities pick its top 5

Thanks to the ongoing correction in the domestic stock markets, some fundamentally strong companies are now available at attractive valuations, said domestic brokerage firm HDFC Securities in its report. In this regard, it suggested stocks from Oil & Gas, AMC, and chemical segments with up to 70 per cent upside. 

The brokerage suggested market participants with both long and medium-term views can use this opportunity to consolidate positions in their respective high conviction stocks.  

In this regard, HDFC Securities pick top 5 picks from different sectors: 

ONGC – Target: Rs 275; Upside: 70% 

Oil and Natural Gas Corporation (ONGC) is a state-owned oil exploration and production company. The company has been aided by rising crude oil prices, as the stock on Tuesday gained over 5 per cent and has jumped nearly 8 per cent in the last two sessions.  

ICICI Securities – Target: Rs 740; Upside: 63% 

An asset management arm of ICICI Bank – ICICI Securities shares have corrected nearly 42 per cent in the last six months and are available at cheap valuations. The company operates a virtual financial supermarket, meeting the three needs of its clients - investments, protection, and borrowing. 

Kansai Nerolac Paints – Target: Rs 630; Upside: 56% 

A subsidiary of Kansai Paint of Japan – Kansai Nerolac Paints Limited is the largest industrial paint and third-largest decorative paint company in India. The stock has been taking a beating (down 31per cent in 6 months) mainly on rising crude oil prices, however, it has strong fundamentals.  

Aarti Industries – Target: Rs 1155; Upside: 64% 

Aarti Industries is a leading Indian manufacturer of Speciality Chemicals and Pharmaceuticals with a global footprint. The management has given capex guidance of Rs 30 bn over the next 2 years and said all the capacities set up during FY22 should ramp up and clock utilisation by FY24-end. 

Nippon Life India – Target: Rs 425; Upside: 54% 

The company is one of the largest asset management companies in India, managing directly and indirectly) assets across mutual funds pension funds managed accounts alternative investments and offshore funds. This is the second stock in the list from the AMC segment HDFC Securities has picked.