Benchmark indices BSE Sensex and Nifty 50 hit a fresh record high on Thursday, 5 August 2021. The Nifty 50 index surged past the crucial 16,300, while the 30-share Sensex crossed 54,700 levels. After delivering strong returns in July, the broader market rally has cooled off so far in August. However, Axis Securities continues to see the broader market doing well but believes that the focus is shifting towards sustainability of the returns. It has maintained the December 2021 Nifty target of 17,400 (22x FY23E earning). Overall, the domestic brokerage firm remains constructive on the market and believes that the dips should be utilized to build positions.
Stocks to buy
ICICI Bank: Buy, Target Price- Rs 810, Upside- 19%
The management expects NIM to be steady on improving loan mix while excess liquidity is utilized with growth picking up. Valuation-wise, Axis Securities believes the bank has further scope for expansions visà-vis its peers.
Axis Securities believes SBI’s unsecured lending profile is robust with over 90% comprising salaried government employees.
Bharti Airtel: Buy, Target Price: Rs 700, Upside: 25%
Market share for the connectivity part of the business has increased from 23-31% in 2 years with 80% of revenue coming from 20% of the customers.
HCL Technologies: Buy, Target Price: 1,150, Upside: 12%
HCL Technologies Ltd management expects traction within services (ITS and ERS), but P&P to be soft and grow in low single digit in FY22.
Tech Mahindra: Buy, Target Price: 1,350, Upside: 12%
Tech Mahindra Ltd reported better-than-expected results in Q1FY22 in terms of revenue growth. Q1FY22 revenue stood at Rs 10,198 Cr, growing by 4.8% QoQ and 4.1% QoQ in CC terms.
Lupin: Buy, Target Price: 1,400, Upside: 26%
Lupin’s specialty product portfolio includes (Albuterol, Solosec & Levothyroxine) in the US, a strong chronic portfolio in India and biosimilars & geographical expansion in emerging and growth markets could drive topline.
Federal Bank: Buy, Target Price: Rs 100, Upside: 14%
The brokerage firm said key positives are increasing retail focus, strong fee income, adequate capitalization, and prudent provisioning.
Equitas Small Finance Bank: Buy, Target Price: 76, Upside: 21%
Axis Securities believes Equitas SFB is eligible for re-rating given the improving profitability, asset quality, and return ratios.
Varun Beverages: Buy, Target Price: 900, Upside: 18%
Given healthy performance in Q2CY21 despite adversity of COVID 2.0, VBL reported healthy performance. However, Gross Margins came under pressure due to RM inflation but owing to cost efficiencies VBL reported EBITDA Margins of 23.3% in Q2CY21.
Mold-Tek Packaging: Buy, Target Price: Rs 585, Upside: 11%
For FY22, the company has guided for a 15-18% volume growth and sustainable
EBITDA/Kg of Rs. 37/Kg driven by better volume off-take, superior product mix, and foray into new higher-margin industries (personal care/healthcare)
Camlin Fine Sciences: Buy, Target Price: Rs 215, Upside: 14%
The company is vertically integrated and engaged in the research, development, manufacturing, commercializing, and marketing of specialty chemicals and blends.
Amber Enterprises: Buy, Target Price: Rs 3,330, Upside: 11%
On participation in high-value products such as compressors, the company is evaluating a partnership option with an existing manufacturer in high-value components to participate in the scheme.
Minda Corporation: Buy, Target Price: Rs155, Upside: 12%
A few other growth drivers for Minda Corp include connected mobility solutions, lightweight solutions, and vehicle access systems.
Steel Strip Wheels: Buy, Target Price: 1,669, Upside: 11%
Steel Strip Wheels has built massive capacity across auto segments including 2W, PV, CV, Tractors, OTR, and Al-alloy wheels, all of which are currently underutilized owing to the slowdown in the Auto sector post-IL&FS crisis in 2018.
Orient Cement: Buy, Target Price: 180, Upside: 13%
Orient Cement has cement manufacturing capacity of 8 mntpa and has plants located in
Telengana, Karnataka, and Maharashtra. It’s a CK Birla group company.
Ashok Leyland: Buy, Target Price: 150, Upside: 13%
Despite the pandemic’s impact, LCVs have witnessed a robust demand largely driven by a surge in e-commerce and transport of dairy and fresh produce.
*Upside % calculated from July 30, 2021 close.
(The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)