In this column, we promised to bring you recommendations of the brokerage houses, and securities firms related to Samvat 2082, or the beginning of the new year since Diwali. As we mentioned earlier, investors are warned to do their due diligence before investments. This time, we bring in the tips by Samco Securities, which is still in the grips of the gold bug. One of its buys include Gold Bees, or tactical ETF (Exchange-Traded Funds) bets. It believes that the gold story in the next 12 months will not be about glitter but protection. After last year’s continuous rally, investors today wonder if the golden bull run is over. “But history suggests otherwise; gold bull markets rarely end with central banks still buying, and real interest rates still near neutral levels,” stated its Muhurat report, which contradicts other experts who feel that the rally will peter out.

“The US dollar has peaked after an aggressive tightening cycle. With inflation still sticky, and the Federal Reserve expected to ease rates further, the next leg of liquidity will find its way into hard assets like gold and silver. The BRIC bloc’s de-dollarisation due to tariffs, and rising geopolitical tensions… only strengthen gold’s role as the world’s preferred ‘neutral reserve’,” feel the confident Samco’s analysts. As far as India, the second-largest consumer of the yellow metal, is concerned, imported gold “could continue to make new highs even if global gold prices consolidate as rupee weakens.” The ongoing strong festive and wedding season will ensure steady demand, and investors, who missed out earlier, will rush in to buy ETFs. “A portfolio that includes gold has delivered better risk-adjusted returns than one with only equities over the long run…. But for heaven’s sake have gold in your portfolio,” states the report.

The Sensex-to-gold ratio compares the performances of the two assets in the past 35 years. “A rising ratio means equities are outperforming gold. It signals optimism, growth, and risk-taking, while a falling ratio shows gold outperforming equities, indicating fear, caution, or capital preservation…. The Sensex-to-gold ratio has moved in a range of 5.5 to 14.5 over the last 35 years. All the major tops (1992, 2000, 2008, 2018) in equity markets have preceded or coincided by a top in this ratio. While major bottoms (1993, 2001, 2009, 2011, 2020) coincided with sharp falls close to 5.5 in this ratio. Those panic phases were followed by massive equity upcycles as risk appetite revved and gold’s relative appeal faded,” stated the report.

With a current market price (when the report came out) of Rs 105, the firm advised investors to buy Gold Bees ETFs at Rs 100-108, and look at a target price of Rs 150 within 12 months. This provides an upside of more than 40 per cent, with a stop loss at Rs 80, or a possible downside of nearly 25 per cent. Gold’s technical chart indicates what is called a cup between 2011 and 2021, when prices came down and went up, followed by a handle, a shorter flatter curve, which led to a continuous rise for the past one year. This possibly indicates that the rally has not lost its steam, unless adverse factors disrupt the global economies, and pull gold down. If investors are concerned about gold prices, they can opt for SIPs, which will prevent them from overinvesting in bullion as part of their portfolios.

There are short-term recommendations for three months. These include Hindustan Zinc, with current price of Rs 500, and a target one of Rs 700, or an upside of 36 per cent, within 180 days. The Vedanta Group firm makes silver, apart from zinc and lead. “With silver currently in a strong uptrend, benefiting from its dual nature as both an industrial and precious metal, the company is well-positioned to gain from higher price realisations, potentially enhancing its revenue and profitability,” stated the report. It added, “The stock recently underwent a correction followed by a robust multi-year breakout, and has now established a solid base near the Rs 400-410 range, a key confluence area of the previous swing low, and the 200-week moving average. The zone has reaffirmed strong support at lower levels.” However, the Rs 400 mark is the stop loss level, which indicates a possible loss of 20 per cent. Since the report, the stock price dropped to Rs 480.

Adani Power, with an upside of over 50 per cent, and a target price of Rs 240 is on Samco’s radar. “In FY 25, the company reported consolidated revenue of Rs 56,203 crore, reflecting 11.6 per cent YoY growth, while EBIDTA surged 17.5 per cent YoY… supported by improved fuel cost optimisation, and higher plant load factors. Margins saw modest expansion as operational efficiencies improved, and the company’s leverage profile strengthened through cash flow monetisation, and disciplined debt reduction, easing interest cost pressures,” explained the securities firm’s report. The stock trades at a premium to public-sector peers, which is justified by its superior earnings visibility, balance sheet improvement, and growth trajectory. The company is well-positioned to benefit from power demand, and capacity expansion in renewables, and hybrid projects. The stop loss is Rs 120, or a 15 per cent loss. At present, it trades at a higher Rs 165, which is almost the same as a month ago.