Top Gainers & Losers: Analysts positive on Divi’s and Maruti, cautious on JSW Steel. Here's what they recommend

Indian equity benchmarks halted a two-day winning run with a loss of around one per cent each on Wednesday — their first negative session of 2023 — amid sustained selling by foreign institutional investors and weakness in heavyweights such as HDFC Bank and Reliance. Globally, nervousness persisted across investors amid rising COVID cases in China and minutes of the Fed's last policy review due later in the day.

Weakness across sectors put pressure on the overall market, with spaces such as financial services, oil & gas, IT and metal being the biggest drags.

The Sensex ended with a loss of 636.8 points at 60,657.5 and the Nifty50 settled at 18,043, down 189.6 points for the day — inches from their lowest levels of the day.

As many as 43 stocks in the Nifty50 basket finished lower.

JSW Steel, Hindalco, Coal India, Tata Steel, ONGC, Tata Motors, PowerGrid, Wipro, Infosys and HDFC Bank were the top laggards, ending between 1.8 per cent and 4.2 per cent lower.

Divi's Labs, Maruti Suzuki and HDFC Life – rising up to one per cent – rose the most among the few blue-chip gainers.

European markets traded in the positive zone at the last count. S&P 500 futures were up 0.3 per cent, suggesting a higher start ahead on Wall Street.

Earlier in the day, the markets in Seoul, Shanghai and Hong Kong ended in the green but Tokyo saw a negative session.

Here are a few large-cap stocks that moved the most on the bourses on January 4 and what analysts recommend:

Divi’s Laboratories 

Divi’s Laboratories was the top Nifty gainer, finishing 1.1 percent higher at Rs 3,430 apiece on NSE.

ICICI Securities Research Analyst Vinay Bafna maintained an 'add' rating on the stock with a target price of Rs 4,173 based on a multiple of 40 times the estimated earnings per share for the year ending March 2024. (22 per cent upside). 

“We raise our revenue estimates by two per cent to factor in the earlier-than-expected recovery in the API segment but cut EPS estimates by 4-5 per cent over FY23E-FY24E to factor high pricing pressures and near-term pressures on margins,” Bafna said.

Maruti Suzuki

Maruti Suzuki was one of the two gainers in the Sensex pack, setting with a gain of 0.2 per cent to Rs 8,404.5 on BSE.

Amit Hiranandani, Sector Lead-Auto at SMIFS, has a 'buy' rating on Maruti Suzuki with a target of Rs 9,739, implying 15.9 per cent upside potential from the current market price.   

“We maintained a long-term positive view on Maruti as renewed efforts, especially in the SUV space, resulting in strong response for recently launched models,” Hiranandani said.

The aim of achieving a dominant position and a few more SUV launches should support higher than industry growth in the coming years, which will not only lift volumes and realisation but also lead to improved margins in the coming years as SUVs are better profitable products, he added.

JSW Steel

JSW Steel shares fell 4.2 per cent to end at Rs 736 apiece on NSE – the worst hit stock in the Nifty50 basket.

ICICI Securities maintained a 'sell' call on the stock with a target price of Rs 550 per share based on 6.2 times FY24 earnings.

"Despite a plethora of operational positives and an unrelenting focus on digitisation and sustainability initiatives at the Dolvi plant of JSW Steel, we see the high valuation at 7.5x FY24E EBITDA as the key deterrent," said Amit Dixit, Research Analyst at ICICI Securities.