NEW DELHI: Some of the worst-performing Sensex stocks of September are the ones that are ‘consensus buys’, with a median upside potential of 10-35 per cent, data suggests.
The 30-pack Sensex has jumped 3.6 per cent so far this month, as a strong set of economic data at home overshadowed concerns over Fed tapering and slowdown in the global economy. Among eight of the 30 Sensex stocks that delivered negative returns for this month, analysts see double-digit return potential in at least five.
Tata Steel, the worst Sensex performer, has 26 ‘buy’ calls among 29 recommendations. This stock is down 9 per cent for the month till Wednesday. A median estimate suggested a 12-month target of Rs 1,758 for the stock, suggesting a potential 33 per cent upside.
The steel maker has surprised positively in seven out of its last 12 quarterly earnings but the June quarter numbers missed analyst estimates. The scrip is trading at a trailing PE of 7.4, which is at a 68 per cent discount to its five-year average of 22.80.
In the case of Mahindra & Mahindra, the second worst Sensex performer, 34 of 39 analysts recommendations are ‘buy’ calls. A median target of Rs 948.41 suggests 26 per cent upside. While this stock is trading at a trailing PE of 35.5 times — a premium of 4 per cent over its 5-year average — it is trading at a forward PE of 16.1 per cent which is at a 11 per cent discount to its 5-year average.
Three other stocks — Maruti Suzuki, HDFC Bank and ICICI Bank — which have delivered negative returns in September, can still offer over 10-13 per cent upsides, median estimates suggest.
The consensus price target for Maruti Suzuki at Rs 7,559 suggests 11 per cent potential upside. This automaker has delivered negative surprises in six out of the last 12 quarters. This included the last two quarters. Yet 27 of 45 analysts tracking this stock have ‘buy’ ratings. The stock has edged 0.2 per cent lower this month.
HDFC Bank has 39 of 43 recommendations as ‘buy’ calls. The stock has a median price target of Rs 1,768 suggesting a 13 per cent potential upside. ICICI Bank has a median target of Rs 788, suggesting 10 per cent upside. A total of 44 of 45 analysts have ‘buy’ ratings on this stock. HDFC Bank and ICICI Bank are down 2 per cent each for the month.