Correction brings new stocks on analyst radar; Jefferies, Morgan Stanley, Nomura, others initiate fresh coverage

More than two dozen broking firms, including well-known ones like Jefferies, Macquarie, Nomura, Morgan Stanley, JM Financial, Axis Capital, Elara Capital and Motilal Oswal Financial Services, among others, have expanded the universe of stocks they cover post the recent correction.

Market experts attribute this trend to the plunge in stock prices that have made many stocks look attractive or at least reasonable in terms of valuations, prompting analysts to offer new stock ideas to their clients.

Leading the trend, Jefferies India and JM Financial have each initiated coverage on four stocks. Jefferies has focused on Patanjali India, Waaree Energies, Sai Life Sciences, and Swiggy, forecasting significant returns over the next 12 months. Similarly, JM Financial has initiated coverage on Tata Communications, Bazaar Style Retail, Sagility, and IKS Health, assigning buy ratings to most.

Other prominent broking firms have also joined this wave of new stock coverage. Motilal Oswal Financial Services has initiated coverage on Dr. Agarwal’s Health and Bharti Hexacom; Macquarie on Adani Green Energy; Nuvama on Afcons Infrastructure; Ambit on ITC Hotels; and Nirmal Bang on Hyundai Motors India.

Independent research analysts Deepak Jasani suggest that analysts anticipate a potential earnings revival, making stock valuations more attractive. With fourth-quarter earnings set to begin in mid-April, expectations of positive surprises in stock performance may have encouraged brokerage firms to release initiation reports, he says.

In a similar context, Rajesh Palviya, Head of Technical Research at Axis Securities, says that several market segments have undergone significant corrections in recent months, bringing many stocks to attractive valuations. This correction has created numerous long-term investment opportunities as a result of which analysts are initiating coverage on select stocks and investment baskets with a long-term perspective, he said.

Since the record highs touched in September last year, Sensex and Nifty have each declined nearly 10 percent, while broader markets have suffered losses exceeding 19 percent. The correction was driven by a combination of factors including sustained selling by foreign investors, high valuations, weaker earnings, a slowing economy, and trade tensions following US President Donald Trump’s tariffs on multiple countries.

“Despite the market downturn, retail investors have remained confident, with no significant redemptions. Many are actively seeking guidance from brokers on where to invest, particularly those holding cash. Given the prevailing long-term growth narrative, investors are looking for promising themes backed by strong earnings and profitability projections,” said Palviya.

“With the recent market correction, a shift in leadership is expected, as the recovery may not be immediate. New sectors and stocks will likely emerge as market leaders. Analysts are focusing on areas where they have strong conviction in future earnings growth, leading to fresh coverage recommendations for long-term investments,” he added.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Discover the latest Business News, Budget 2025 News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!