Indian share markets hit fresh record high yet again, with BSE Sensex ruling above 49,200 for the first time ever. The broader Nifty 50 index topped the crucial 14,450 level
According the market watchers, Indian stock markets are in overbought zone as Nifty 50 index closed the previous session with a P/E multiple of 38.92. Image: Reuters
Indian share markets hit fresh record high yet again, with BSE Sensex ruling above 49,200 for the first time ever. The broader Nifty 50 index topped the crucial 14,450 level in today’s upbeat trade. Domestic research and brokerage firm IIFL Securities has picked five large-cap stocks which have the potential to offer decent gains in the year 2021 on the back of rich valuations. The brokerage firm said that valuations are 40 per cent richer than last year, following a major two-month rally which saw participation from almost every sector. The brokerage firm believes that private banks have made excess provisions, and are likely to lead the way. While the IT sector led by Infosys, is in an upgrade cycle, which should continue in 2021.
Cipla’s India business has significantly outperformed market growth in FY21 led by the COVID-19 drugs portfolio. The brokerage firms sees 13.31 per cent rally in the stock price as it believes that the company’s One-India strategy will continue to drive synergies and market-beating growth across its three business segments of prescription, trade generics and consumer healthcare. Moreover, the Revlimid patent settlement for potential generic launch in 2H-FY23 provides further growth visibility.
An upside of 7 per cent will be needed to hit the target price of Rs 580 apiece pegged by the brokerage firm. The private bank’s potential rebound in profitability, strong value accretion from its insurance, asset management and broking subsidiaries and stable management team, IIFL Securities believes that ICICI Bank stock is likely to continue re-rating.
Target price: Rs 1,480
On the hopes of strong October-December quarter earnings, IT stocks are mapping an upward trajectory. Infosys share price hit a new 52-week high of Rs 1,381.25 per share in today’s strong trade. The domestic brokerage firm believes that stock has a further potential of rallying up to 13 per cent from the previous close. It noted that Infosys is well placed to gain wallet share within clients, led by its cloud offerings and automation-led efficiency solutions, further boosted by an institutionalised large-deals team with focus on higher win rates. “We believe Infosys will outperform TCS on revenue growth by 500bps+ in FY21, after a 300bps gap last year as well,” it said.
Due to attractive valuations, SBI Life Insurance share price could rally 13.4 per cent. IIFL Securities noted that the company shows greater resilience against macro pressures versus peers, helped by strong renewals.
Target price: Rs 6,500
The domestic research company sees over 10 per cent gain in the SRF share price. SRF is poised for strong earnings growth in coming years, on the back of promising opportunities in its fluoro specialties business and a cyclical rebound in its refrigerants business, as end-use demand from the autos and white goods industries recovers.
(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.)