The BSE Sensex and Nifty 50 finished the financial year 2020-21 on a high note, with positive returns across the board.
The BSE Sensex and Nifty 50 finished the financial year 2020-21 on a high note, with positive returns across the board. Metals and IT grew the fastest across sectors, while FMCG grew the slowest. During the fiscal year, stocks in the auto and real estate sectors have performed well. “While FY21 was very solid, helped by low valuations and a low base, March was a mixed bag,” said Naveen Kulkarni, Axis Securities’ Chief Investment Officer.
The December Nifty 50 index target of 17,200 has been maintained by Axis Securities. According to the brokerage company, earnings growth was slow for the entire decade from 2010 to 2020, with a CAGR of 7%. (doubling in 10 years). Mid- and small-cap stocks have outperformed large-cap stocks by a wide margin in FY21. This pattern is expected to continue in FY22, according to a domestic brokerage firm, and earnings growth for the broader market is expected to be very high.
Top stock picks include:
Private Bank has set a target price of Rs 720, which reflects a 24% increase from current levels. Higher loan growth, improving operating income, a strong provision buffer, and a strong deposit franchise would all contribute to the bank’s ROAE/ROAA expansion in FY22-23E.
State Bank of India: To meet Axis Securities’ target price of Rs 477, SBI stock would have to rise 31% from its previous close. With a healthy PCR, robust capitalization, a solid liability franchise, and an improved asset quality outlook, SBI remains the best bet on the Indian economy’s gradual recovery among PSU banks.
Federal Bank: The brokerage firm expects a 23% increase in the stock price of Federal Bank, with a price goal of Rs 93 per share. Axis Securities sees rising retail emphasis, high fee income, adequate capitalisation (Tier-1 at 13%), and prudent provisioning as main positives.
Equitas Small Finance Bank: Due to its improving profitability, asset quality, and return ratios, Equitas Small Finance Bank is eligible for re-rating, according to a domestic brokerage company. It has set a target price of Rs 72, up 20% from the previous close.cent from the current level of Rs1,003 per share.
Varun Beverages: Axis Securities expects the current momentum to continue, with market growth resuming, helped by unlocking, as seen in Q4CY20. The stock has a target price of Rs 1,230, indicating a 23% increase from the current price of Rs 1,003 per share.
Relaxo Footwear has maintained healthy operating cashflows, asset turns, and EBITDA margins over the years, according to the brokerage, making it a capital-efficient firm. It has a price goal of Rs 1,013 per share, implying a 15% gain.
Camlin Fine Sciences: With a target price of Rs 165, the brokerage firm sees an 18% upside in Camlin Fine Sciences stock. CFS is a global leader and integrated producer of conventional antioxidants and vanillin, as well as a variety of other shelf-life solutions, fragrance products, and performance chemicals.
Amber Enterprises: We believe in this systemic long-term storey because of the healthy build-up for the upcoming season, government policy initiatives, and funding through the PLI scheme. It has a target price of Rs 3,658, which is a 10% increase.
Minda Corporation: Migrating to BS6 would benefit Minda Corp because the company’s product, wire harness (25-30 percent market share), would see a significant increase in share of business in terms of both value and volume. To reach the goal of Rs 121 per share, a 20% increase from the previous close is needed.
Steel Strip Wheels: The growing contribution of high-margin Al-alloy wheel rims to overall sales would help to boost margins. Steel Strip Wheels registered about 7% of revenue from Al-alloy wheels in FY20, and plans to raise that to 25% or more in the coming years. The brokerage firm expects the stock to grow by 25%, with a target price of Rs 877 per share.
Bharti Airtel: In Q2FY21, Bharti Airtel posted strong results, beating consensus expectations on both financial and operational metrics. To reach the target price of Rs 676, a 31 percent increase is expected.
HCL Technologies: The brokerage firm has set a target price of Rs 1,088 per share, representing an increase of 11%. The latest deal trend for HCL technology continues to be positive, representing momentum in the Retail & CPG, Manufacturing, and BFSI verticals.
ACC Ltd: The stock is currently trading at an EV/EBITDA ratio of 8.3x CY22E and 7.14x CY23E. Axis Securities has recommended a ‘buy’ rating on the stock, with a target price of Rs 2,100 per share, valuing the company at 10x its CY22E EV/EBITDA.
