NEW DELHI: The S&P BSE Sensex has fallen a little over 6 per cent in the last one year, but there are stocks on the bechmark index that have declined up to 60 per cent in the same period. Out of the 30 Sensex stocks, 21 stocks have wiped out gains in the last one year and have, in fact, brought negative returns. These stocks include names like Vedanta (down 66%), Tata Steel (down 56%), Hindalco (down 56%), ONGC (down 48%), GAIL (down 38%), and Tata Motors (down 36%). Uncertainty around the US Federal Reserve rate hike, and rising fears of slowdown in China, the world’s second largest economy, have led to rout in global equities. And India has been no exception. Indian stock market has plunged over 10 per cent in the last one month and a little over 8 per cent since January. The question now is, should one invest in largecap stocks at current levels? According to experts, valuations of most of the largecap names as well as quality midcaps have come down. Therefore, investors with a holding period of over 1 year should definitely look at buying them at current levels or on further dips. “I am not saying that this is a bottom, and therefore markets cannot go down below this level. No, we do not know to what level they can go, because of this global panic right now,” says Vibhav Kapoor, Group CIO, IL&FS, in an interview with ET Now. “But, over 6-12 months, I am pretty confident that the risk-eward ratio is very good. You must stay in the larger, liquid names, and not go for midcaps, because midcaps you do not know how they will behave,” he added. Kapoor is of the view that if you are getting the largecap and the big liquid companies at reasonable valuations, then that is the space one should be in. Valuations of Indian equities remain attractive, with market cap-to-GDP of 80% for FY15, which is slightly above 10-year historical average of 76%. “The Sensex trades at 15.9x P/E, slightly below its long-period average of 16.3x. Sensex P/B is near its 10-year average of 2.7x and RoE at 16.4% is below the long-period average of 18%,” said a Motilal Oswal report. “After a long time, current valuations are looking reasonably attractive, of course, since there is a panic in the market. Earlier, you did not know what levels the market can go down to, but I would be reasonably sure that even in the worst or worst of cases, by March 2016, you would be back to current levels or better levels than this,” says Vibhav Kapoor, Group CIO, IL&FS. “The risk-reward ratio over a six-month or a one-year timeframe is absolutely excellent. You are getting a very liquid and top-name stocks at very reasonable valuations. It is just the time to buy. Maybe you do not buy 100%, but you definitely start to buy,” he added. Sanjeev Prasad, Kotak Institutional Equities, senior ED & Co-Head, in an interview with ET Now, said that if you have cash, it is time to deploy selectively, because a lot of stocks have come off quite significantly over the last one month or so. “Many of the largecaps names have come off 15-20% in the last one month, and it is not as if much has changed. For some of the names like NTPC, Power Grid, etc, nothing has really changed for them,” he added. Prasad sees some value emerging in many of the names which have just been sold either because of general concerns about the market as a whole, or in many cases, they were simply over-owned. People are still holding the defensive part of the portfolio which is your consumer, IT, pharma. If you look at the valuation gap between the defensives and the cyclical, that has become even more stark now. It is time to selectively start looking at some of the good-quality cyclicals which have come off significantly. Top stocks to bet on: Nomura: HCL Tech, Axia Bank, Suzlon, L&T, Maruti top bets Brokerage Nomura says while global growth will be on a generally upward trending path over the coming quarters, which will also get reflected in corporate earnings and lead equity prices higher, the ongoing policy normalisation in the US will likely cause recurring corrections in those Asian markets, which have weaker external fundamentals. HCL Tech is Nomura’s preferred exposure to ITeS space in the India portfolio, as it focuses on market share gain and better propositions in segments driving demand. “Given high exposure to the rural market, we believe automaker Maruti Suzuki will continue to outperform India’s passenger car industry. The brokerage prefers Indian private banks to gain exposure to a likely positive surprise in inflation (lower inflation) and as India’s investment cycle bottoms. Axis Bank is the preferred pick here. Mehraboon Irani, Nirmal Bang Securities: I like HDFC Bank for the simple reason that I still believe that the markets have to shed at least 5%, 6%, 7% more and in that particular case, ICICI Bank could lose 10-15% and HDFC Bank will lose 7%. But, somewhere along the line, investors will have to learn to shift their portfolios from the safer havens to slightly relatively high-beta stocks. That may not happen in the next one-two quarters, but it will happen somewhere possibly in early 2016. Sudip Bandyopadhyay, President, Destimoney Securities Pvt Ltd: There has been a risk aversion as far as global investors are concerned. All we have been saying is that you should stick to the largecaps, and not try to be adventurous and get into midcap and small cap. He cautions that this is a time of extreme volatility, and advises investors to stick to counters where there is strong conviction. Maybe if you 100 bucks, put 20 or 30 bucks to work at this stage, wait for some more correction if at all there is any, and then put the balance money. As far as sectors are concerned, we like IT, pharma and automobiles. In the IT, we will definitely recommend buying Infosys at current levels. In pharma, we like Sun Pharma after all the correction which has happened. In the automobiles, we like Maruti, it’s a great company. With the festive season coming, with things hopefully improving in Indian economy, Maruti will be a big beneficiary. But remember, all these three stocks if you are buying, you should buy with one year time horizon at least to reap at least 20% plus returns. (Views and recommendations given in this section are the analysts’ own and do not represent those of EconomicTimes.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)