10 stocks to buy in 2022: Bharti Airtel, Infosys among top bets for next year; check full list, target prices

IT stocks may lead the rally in 2022 supported by cyclicals like Capital goods, BFSI, Real Estate and Auto stocks. Midcap, small cap stocks are likely to extend outperformance.

Stocks to buy in 2022
These stocks may rally upto 41.5% in 2022

Indian equity markets had a stellar run this year with Nifty up around 22%. Nifty Midcap 100 and Nifty Smallcap 100 sharply outperformed with gains of around 43% and 53% respectively. Indian equity markets are likely to extend gains in 2022 as well on account of continuation of economic recovery and strong earnings growth. Going by the history of three decades, the ongoing bull market may extend for the next few years with multifold gains. While the midcap space is expected to extend its outperformance in near term, IT stocks may lead the rally supported by cyclicals like Capital goods, BFSI, Real Estate and Auto stocks, according to ICICI Direct. Midcap and small cap stocks are likely to extend outperformance in the coming year as well.

10 stocks to buy in 2022 for gains

Bharti Airtel
Target price – Rs 956 per share

On the back of higher ARPU and continuous growth in the 4G subscriber base, the company reported a robust set of financial performance during Q2 FY22. Consolidated EBITDA increased by 6.3% QoQ while reported PAT stood at Rs 1,134 crore in Q2. Airtel Business vertical, which offers a gamut of digital solutions to the enterprises, could be the next growth engine for the company. Investment in Airtel will be a long term play. Choice Equity Broking assigned a “BUY” rating on the stock with a target price of Rs 956 per share and upside potential of 41.5%.

Aditya Birla Fashion & Retail
Target price – Rs 360 per share

ABFRL has strengthened its balance sheet through recent equity infusion with net debt declining sharply from Rs 2500 crore to Rs 870 crore. The stock has also witnessed a faster retracement of the entire 52 month’s corrective decline in just 18 months, signalling a robust price structure. The share price is expected to reach Rs 360 in coming months as it is 161.8% external retracement of the entire previous major decline in 2020. The upside potential for the stock, according to ICICI Direct Research, is 31%.

ICICI Bank
Target price – Rs 900 per share

The lender reported strong performance in Q2 FY22 with PAT growth of 30% YoY driven by healthy loan growth of 17%, margin expansion and lower NPA provisioning. NII grew by 24.8% as NIM improved by 11bps owing to lower reversals, high growth in high-margin unsecured portfolio. Choice Broking assigned “BUY” rating to stock with target price of Rs 900 valuing standalone banking business at Rs 710 (at P/ABV of 2.5x FY24E), and subsidiaries valuation of Rs 190. The upside potential for the stock is 22.3%.

United Spirits
Target price – Rs 1080 per share

Liquor stocks posted a strong recovery this year leading their way to new highs scripting turnaround on long term charts. United Spirits’ price has resolved out of its six year consolidation phase, signalling structural turnaround and new bull cycle ahead. The stock price is likely to head over Rs 1,000 in near term. ICICI Direct has set target price at Rs 1080 with upside potential of 22%.

Schaeffler India Ltd
Target price – Rs 10,380 per share

During Q3 CY2021, the company reported a 20.7% sequential growth in the total operating income to Rs 1,487.6 crore. EBITDA margin increased by 99bps QoQ, thereby leading to a 27.7% rise in EBITDA. Reported PAT increased to Rs 170.8 crore. Going ahead, the company would benefit from the revival in the automotive sector and from higher exports to its parent company and to other markets. Also the government policies for boosting indigenization will act as tailwind for the sector The target price is Rs 10,380 and upside potential is 20.5% for the stock, according to Choice Broking.

HDFC Life Insurance Company Ltd
Target price – Rs 833 per share

The company reported encouraging numbers in Q2 FY22, with new business premium coming in at Rs 6,596 crore, up 12.3% YoY. Total premium collection was up 14.2% YoY. The company is likely to improve its performance metrics on the back of tailwinds in the sector and the Exide Life deal. Choice Broking values HDFC LIFE at P/EV multiple of 4.4x (based on FY23 EV) to arrive at a target price of Rs 833 and upside potential of 30.3%.

ABB
Target price – Rs 2750 per share

The BSE capital good index is coming out of 13 year’s hibernation exhibiting strength. Within the capital goods space, ABB looks positive as it has already logged a breakout above decade long consolidation and continues to trend higher while maintaining a higher high-low. The stock has witnessed a faster retracement of the last falling segment as the nine quarter decline was completely retraced in just four quarters. ABB stock may head higher towards Rs 2750. The upside potential for the stock is 25% according to ICICI Direct Research.

Hindustan Unilever Ltd. (HUL)
Target price – Rs 2821 per share

On the back of 4% YoY volume growth and 7% pricing growth, the company reported an 11.4% growth (YoY) in the consolidated top-line in Q2 FY22. Consolidated EBITDA increased by 10.3% while reported PAT increased by 10.5%. With recovery in consumption continuing at a good pace in the urban markets, the overall sentiment is cautiously optimistic regarding the overall demand recovery in the near term. Despite HUL’s share price correcting around 16.2% in the last three months. Choice Broking assigned a “BUY” rating on the stock with a target price of Rs 2,821 per share and upside potential of 22.6%.

HCL Technologies
Target price – Rs 1485 per share

The IT sector has been spearheading the ongoing bull run and HCL Technology has been in a steady secular uptrend post its multi year breakout in 2020. The company is well positioned to deliver strong growth in IT services and ER&D space due to improving TCV, broad based nature of growth across services, improving client metrics and strengthening of management capabilities in Australia, Canada, France, Germany, etc. ICICI Direct Research remains positive on the stock and has set target price of Rs 1485. The stock has an upside potential of 17%.

Infosys
Target price – Rs 2150 per share

In Q2 FY22, the company reported a 6.1% sequential growth in consolidated total revenue. Digital revenues increased by 42.4% YoY and formed around 56.1% of the total revenue. At a CMP of Rs 1,866, Infosys is currently trading at a TTM P/E multiple of 37.6x. Based on FY23E earnings, it is trading at a P/E multiple of 30.5x. Considering the robust outlook and company’s growth leadership in the sector, Choice brokerage firm has arrived at a target price of Rs 2,150 per share, 15.2% higher than the recommended price, with an upside potential of 15.2%.

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