Kotak Institutional Equities expects modest return from the Indian market under a base-case scenario that sees a strong economic recovery, a gradual rise in domestic and global bond yields, however, stock-specific actions will continue in the midcaps.It said that the market could experience a significant correction in the event of a sharp rise in bond yields due to inflation surprises.The Nifty 50 Index trades at 22.1x the EPS for FY2022E and 19.4x the EPS for FY2023E. This suggests that the market has already priced in strong earnings growth as well as stable/moderately high bond yields.The equity markets will need to adapt to higher interest rates, as central banks begin to implement exit plans to end their loose monetary policies in the coming months.Although there may be some consolidation in benchmark indices', Kotak has modified the midcap portfolio to 18 stocks, including Kensai Nerolac Paints and Sobha Ltd. Whirlpool.The 18 stocks included in the Kotak Institutional Equities portfolio are ABB, Apollo Hospitals and Jubilant FoodWorks.KNPL, Sobha, and Whirlpool are added to our midcap portfolio. Sobha is a solid investment in the residential real-estate cycle. Kotak stated in a report that we are optimistic about a multi-year investment period for reasons previously discussed. Although the stock has made a strong recovery from its bottom, it is still only slightly higher than pre-pandemic levels. The stock's 12-month fair value is Rs 520.Whirlpool was also added to the portfolio by a domestic brokerage firm. Over the past twelve months, the stock has not performed well. This has resulted in lower multiples. The stock trades at 37x the FY2023E EPS, compared to its pre-COVID forward multiple of 42.: Investment tips and opinions expressed by Moneycontrol.com investment experts are his and not those of the website management. Moneycontrol.com recommends that users consult certified experts before making any investment decisions.
