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Indian share market indices BSE Sensex and Nifty 50 ended April 2021 on a negative note, falling up to 2.5 per cent on the back of rising COVID-19 cases and announcements of lockdown-like measures. The challenges of the second wave of COVID-19 seem to be real which may severely impact the economy in the forthcoming quarters. “Considering a strong run in commodity prices and an improving global situation, the Nifty 50 is unlikely to see any major downgrades in the near term,” Naveen Kulkarni, Chief Investment Officer, Axis Securities.
Kulkarni added that the market will remain range-bound but it does offer good opportunities across the spectrum of sectors to add quality stocks that can generate excellent long term returns. In the previous month, the Nifty Metal index surged 21 per cent while the Nifty Pharma index gained 10 per cent. The Nifty commodities index was also up 5 per cent while most other sectors witnessed a decline. Axis Securities has maintained Nifty 50 index target for December 2021 at 16,100.
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ICICI Bank: Axis Securities has given a ‘buy’ rating to ICICI Bank stock with a target price of Rs 720 apiece, up 20 per cent from April 30, 2021 close. It noted that higher loan growth, improving operating profits, strong provision buffer coupled with strong deposit franchise will help ROAE/ROAA expansion over FY22-23E.
State Bank of India: Domestic brokerage firm sees a 35 per cent rally in SBI stock, with a target price of Rs 477 apiece. It believes among PSU banks, State Bank of India remains the best play on the gradual recovery in the Indian economy given a healthy PCR, robust capitalization, a strong liability franchise, and an improved asset quality outlook.
Federal Bank: Federal Bank stock price looks to touch Rs 93, a 16 per cent upside from April 30, 2021 close. The report highlighted that the Federal Bank is cautiously building the loan mix toward high-rated corporates and retail loans. The bank’s liability franchise remains strong with CASA plus Retail TD of +90% and one of the highest LCR amongst banks.
Equitas Small Finance Bank: This SFB has a target price of Rs 72 apiece, up 30 per cent. The brokerage firm believes Equitas Small Finance Bank is eligible for re-rating given its improving profitability, asset quality, and return ratios.
Varun Beverages: It has a target price of Rs 1,200, implying a rally of 26 per cent from the closing level of April 30. Axis Securities said that with business reporting healthy growth in Q1CY21 driven by in-home consumption, product portfolio expansion, efficient go-to-market execution and distribution led market share gains.
Relaxo Footwears: It has a price target of Rs 1,013 apiece, a rally of 16 per cent. The brokerage firm said that as 40 per cent of raw materials are imported, and are derivatives of crude, any fluctuation in crude prices will impact the pricing of its key raw material adversely impacting the company’s profitability.
Camlin Fine Sciences: The brokerage firm sees an upside of 20 per cent in Camlin Fine Sciences stock, with a target price of Rs 184. CFS is one of the world’s leading and integrated manufacturers of the most preferred traditional antioxidants and vanillin and manufactures various other shelf-life solutions, aroma ingredients and performance chemicals.
Amber Enterprises: The brokerage firm said that it expects Amber to register Revenue/Earnings CAGR of 15.4%/21.8%, respectively over FY20-23E. It also believes that the near-term order outlook remains strong for RAC as well as mobility solutions. It has a target price of Rs 3,660, a gain of 18 per cent.
Minda Corporation: It has a target price of Rs 121, an upside of 20 per cent. The brokerage firm noted that the demand recovery in CVs, which constitutes 20% of Minda Corp revenues, will further boost its topline over the next two to three years.
Steel Strip Wheels: Axis Securities sees a 23 per cen rally in Steel Strip Wheels stock, with a price target of Rs 877 apiece. Being in an oligopoly market, Steel Strip Wheels commands leadership with a 55 per cent market share in the steel wheel rims and 20 per cent in alloy wheels.
Lupin: Lupin’s specialty product portfolio includes (Albuterol, Solosec and Levothyroxine) in the US, a strong chronic portfolio in India and biosimilars and geographical expansion in emerging and growth markets could drive topline, the brokerage firm said. It has target price of Rs 1,225 apiece, up 15 per cent.
Tech Mahindra: Q3 operating margin expanded 170 bps to 15.3 per cent. “We believe Tech Mahindra has a resilient business structure from a long term perspective,” the brokerage firm said. Axis Securities sees a 16 per cent upside in the stock price at a target price Rs 1,116 apiece.
Bharti Airtel: Bharti Airtel stock price has a target price of Rs 676 apiece, a rally of 26 per cent. Regulatory challenges are well known and Bharti Airtel is well capitalized to deal with the payouts as it has raised enough capital and has access to debt as there are no major business solvency risks associated with it.
ACC Ltd: ACC stock is currently trading at 8.3x CY22E and 7.14x CY23E EV/EBITDA respectively. Axis Securities has recommended a ‘buy’ valuing the company at 11x CY22E EV/EBITDA to arrive at a target price of Rs 2,230 per share, implying an upside potential of 18 per cent.
(The stock recommendations in this story are by the respective research and brokerage firm. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)