ICICI Securities Advises Buying in Godrej Properties and Schaffler Shares

Indian Market Sees Volatile Week

The Indian stock market kicked off the week on a weak note, with the GIFT Nifty trading around 24,052.5 as of 8:17 AM, a discount of 182 points to the previous close of Nifty futures at 24,234.60. This came after the benchmark indices, the BSE Sensex and Nifty 50, extended losses for a second consecutive day in the previous session.

The Sensex declined 516 points (0.66%) to close at 77,328.19, while the Nifty 50 fell 151 points (0.62%) to settle at 24,176.15. Heavyweight lenders such as State Bank of India, HDFC Bank, ICICI Bank, and Axis Bank were the key drags, with 18 of the 30 Sensex constituents ending in the red.

However, broader markets remained relatively resilient, with the BSE Midcap index slipping marginally by 0.05%, while the BSE Smallcap index edged up 0.15%, continuing to outperform frontline indices. The overall market capitalisation of BSE-listed companies held steady at around ₹473 lakh crore, supported by strength in mid- and small-cap stocks.

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Despite geopolitical turbulence, equity benchmarks navigated a volatile week to finish on a positive note. The Nifty 50 settled at 24,176, gaining 0.70%. While the frontline index remained steady, the broader market stole the spotlight, with the Nifty Midcap index surging 3.5% to a fresh record high, while Smallcaps rallied over 4%. Sectorally, Auto, Defence, and Capital Markets emerged as the primary leaders, whereas PSU Banks and Oil & Gas saw relative underperformance.

A key catalyst for this momentum was the decline in Brent Crude, which once again retreated after testing the $120 mark that had fueled momentum in the equities.

Weekly Performance Comparison

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The index started the week on a strong note, hitting a weekly high of 24,482. Profit booking emerged on Friday, triggered by the 80% retracement of the preceding decline (24,601–23,796). The weekly price action produced a bullish candle with a "higher high-low" pattern, suggesting the current dip is a healthy breather within an overall positive structure.

Over the past three weeks, the Nifty 50 has consolidated while absorbing significant headwinds, including geopolitical tensions and oil price spikes. The index maintained its technical strength by holding above the 20-day EMA and retracing only 38% of its previous 11% rally, signalling a robust underlying structure.

Technical Outlook

Our constructive bias is further validated by the following observations:

1. The current uptrend is reinforced by participation across all sectors and robust market breadth as currently 83% of the Nifty 500 components are trading above their 50 days SMA compared to last week's reading of 72%. While for 200 days SMA similar reading has improved from 40% to 52%.
2. While Midcaps are already trading at record highs, the Nifty remains 8% below its previous peak. Furthermore, 18 months breakout on the Nifty 500 vs. Nifty 100 ratio chart suggests that the broader market is positioned to continue outperforming its large-cap peers.
3. Historically, the Nifty 50 shares a positive correlation with its global peers. The current buoyancy across US and Asian equities provides a strong external tailwind, creating a favourable setup for the domestic market to narrow the performance gap through a catch-up activity.

Key Monitorables

A. Inflation data US & India B. IIP data

Stock Recommendations

Dharmesh Shah of ICICI Securities recommends buying Godrej Properties Ltd, and Schaffler Ltd.

• Buy Godrej Properties in the range of ₹1,820-1,875. He has Godrej Properties share price target of ₹2,088 with a stop loss of ₹1,718.
• Buy Schaffler in the range of ₹4,100-4,250. He has Schaffler share price target of ₹4,738 with a stop loss of ₹3,928.