The markets are taking a breather after the hectic rally on Tuesday. If you are wondering which stocks to bet on, Axis Securities picked six largecap stocks for February. The selected stocks span across sectors from financials, telecom, consumer staples, and healthcare. The brokerage house believes that these sectors are well-placed to deliver superior performance, as per the brokerage house.
Bajaj Finance
The expectations are that Bajaj Finance will continue its growth trajectory, reporting a consistent 24-25% CAGR AUM growth over the medium term, with growth resuming from FY27 onwards, with contribution from the core existing products and a further push from the scale-up of the new products
The brokerage sees a target price of Rs 1,200, an upside of 33% from the current market price.
State Bank of India
State Bank of India’s performance has been the best amongst the larger banks. The country’s largest bank remained well-poised to sustain its performance, supported by the management’s focus on deepening its liability franchise.
This was helped by allocating capital to higher RoRWA assets and maintaining a disciplined pricing approach, along with leveraging tech to drive operating efficiency.
“The outperformance on NIMs in Q2, with the trend reversing earlier than expected, provides cushion to the bank’s 1% RoA delivery,: said Axis Securities. The brokerage sees a lift of upto 11% from the market price over the next 12 months to the target price of Rs 1,135.
HDFC Bank
HDFC Bank has been consistently performing on its guidance in its endeavour to revert to its pre-merger levels across metrics, and its execution capabilities remain strong. India’s largest private lender will take constructive steps to strengthen its retail-focused deposit franchise with an emphasis on mobilising CASA Deposits.
“Though margin recovery is taking longer than earlier expected, we expect continued TD repricing, high-cost borrowings getting replaced, strong CASA mobilisation, and improved growth to drive gradual margin improvement,” said Axis Securities.
The brokerage has set a target price of Rs 1,190, which means it sees the stock to rise 30% in the coming 12 months.
Bharti Airtel
Axis Securities’ fourth pick for February is Bharti Airtel. The brokerage maintained a ‘Buy’ rating on the stock, driven by the company’s superior margins, impressive subscriber growth, and increased 4G conversions.
Airtel’s digital portfolio is gaining traction alongside market share expansion. It has maintained a substantial share of 4G/5G net additions, with the smartphone customer base growing by 5.1 million QoQ, now accounting for 78% of the total customer base.
Moreover, Airtel’s Africa business is expected to continue its strong performance on a sequential basis. The company remains on track to reach its ARPU target of Rs 300, supported by rising data consumption and deeper rural penetration. Average data usage per customer remains strong at 28.3 GB per month, further bolstering revenue growth.
The brokerage house sees a target price of Rs 2,530, implying an upside of 30%.
Avenue Supermarts
D-Mart has faced several challenges over the past few years, despite that Axis Securities picked it among the largecap stocks it wants to bet on. The brokerages said that the company has undertaken several initiatives to address challenges, such as changes in leadership to revamp the slowing GM&A category.
The company is focusing on improving profitability in D-Mart Ready through a gradual expansion strategy. Lastly, it is targeting a 10- 20% store addition on an existing base of 442 stores, which is a step in the right direction.
Additionally, a reduction on GST rate has spurred consumption and indirectly supported discretionary spending. The brokerage retained a ‘Buy’ call on the stock, implying an upside of 23%.
Max Healthcare
Axis Securities’ last bet is on what it calls as “Leader in charge” – Max Healthcare Institute. The company’s management reiterated guidance of 6–7% average revenue per occupied bed (ARPOB) growth in mature hospitals, supported by higher case complexity and an improving clinical mix, alongside sustained occupancy of around 80%.
“Developing hospitals are expected to ramp up gradually, driving incremental occupancy and revenue growth. The company remains focused on scaling oncology and international patient businesses while maintaining strong return ratios,” the brokerage said.
The recent Central Government Health Scheme (CGHS) rate revision is expected to generate a revenue uplift of over Rs 200 crore once fully implemented across CGHS and CGHS-linked schemes such as Ex-Servicemen Contributory Health Scheme (ECHS).
The brokerage sees a target price of Rs 1,250, which is an upside of 28% from the current market price.
Overall, with these picks for February, the brokerage has a heavy interest in financial services stocks. Furthermore, structural growth plays, offering long-term earnings visibility, will continue to do well. Style rotation and sector selection are keys to generating alpha as earnings expectations from the broader market remain intact.