Nifty 50 index may head to 17,400 by December 2021, on the back of upgrades in the metals and mining sector which delivered robust results and saw high metal prices, said Axis Securities. In June 2021, India VIX fell to 14, which is significantly lower than the long-term average of 22. The domestic research firm believes that if VIX continues to head southward, it will trigger a further rally in the broader market. Mid Caps and small caps saw the previous bull run in 2017. The broader market regained flavor in the second half of 2020 and the performance has continued in 2021.
Also, India’s total market cap to GDP was seen trading at 118 per cent, above its long-term average. The current market cap is indicating a broader market rally. “With the positive earnings momentum in the current cycle, it is likely to see higher levels of Mcap to GDP in the upcoming quarters,” it said. It also added that since November, smallcaps and midcaps are picking up steam and are expected to deliver excellent returns in 2021 as economic uncertainties reduce and volatility declines. In the last 2 months, the Indian market has played a catch-up rally with the global market as the COVID trajectory seemed to head southward.
Stocks to buy
ICICI Bank: Axis Securities has given a ‘buy’ rating to ICICI Bank stock with a target price of Rs 750 apiece, up 19 per cent from June 30, 2021 close.
State Bank of India: Domestic brokerage firm sees a 22 per cent rally in SBI stock, with a target price of Rs 510 apiece. It believes among PSU banks, State Bank of India remains the best play on the gradual recovery in the Indian economy.
Bharti Airtel: Bharti Airtel stock price has a target price of Rs 700 apiece, a rally of 33 per cent from June 30’s closing levels. Bharti Airtel’s 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: The brokerage firm has given a target price of Rs 1,135 apiece, a jump of 15 per cent from June 30 closing levels. The recent deal trend continues to be healthy for HCL Technologies and is reflective of traction in Retail and CPG, Manufacturing, and BFSI verticals.
Tech Mahindra: The research firm believes Tech Mahindra has a resilient business structure and better revenue growth visibility from a long-term perspective. Axis Securities sees a 15 per cent upside in the stock price at a target price Rs 1,255 apiece.
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 1,400 apiece, up 22 per cent.
Federal Bank: Federal Bank stock price looks to touch Rs 100 apiece, a 15 per cent upside from June 30, 2021 close. The research firm believes that the bank continues to proactively execute its strategy of a branch-light and distribution-heavy franchise.
Equitas Small Finance Bank: It has a target price of Rs 70 apiece, up 19 per cent from June 30’s closing level. The brokerage firm believes Equitas Small Finance Bank is eligible for re-rating given its improving profitability, asset quality, and return ratios.
Varun Beverages: The research firm pegged a target price of Rs 900, implying a rally of 23 per cent from the closing level of June 30. Axis Securities said even though lockdown was imposed across 95 per cent states during April-May, the company performed better.
Mold-Tek Packaging: It will take Mold-Tek Packaging to jump 22 per cent from the June 30’s closing level to hit the target price pegged by Axis Securities at Rs 585.
Camlin Fine Sciences: The brokerage firm sees an upside of 15 per cent in Camlin Fine Sciences stock, with a target price of Rs 215.
Amber Enterprises: The brokerage firm said that it expects Amber to register a Revenue CAGR of 37% over FY21-23E. It has a target price of Rs 3,290, a gain of 12 per cent.
Minda Corporation: It has a target price of Rs 148, an upside of 15 per cent. The brokerage firm noted that Minda Corporation will be a key beneficiary of migration to BS6.
Steel Strip Wheels: Axis Securities sees a 17 per cen rally in Steel Strip Wheels stock, with a price target of Rs 989 apiece. Axis Securities expects Steel Strip Wheels to outperform the industry growth.
Orient Cement: Axis Securities has given a target price of Rs 180, a 32 per cent rally from previous month’s closing level. It added that Orient Cement stock is currently trading at 5.5x FY22E and 4.1x Y23E EV/EBITDA respectively.
(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.)