Finance Minister Nirmala Sitharaman has forced the bulls to take charge once again with her Union Budget. Dalal Street is saluting the ‘no negative’ budget that the government has delivered with Sensex reclaiming 50,000 and Nifty breaching 14,700. But the question remains where should investors put their money to illicit healthy gains from the resumed rally that Sensex and Nifty seem to be charting on. The Budget is a growth-oriented one, with an aim of keeping India on the growth trajectory as it emerges out of a pandemic. Here are the stocks IIFL Securities believes could do well.
Target price: Rs 670
The private sector lender has demonstrated strong growth in its quarterly results. “ICICI Bank, India’s second-largest private bank, is among the few banks that have manageable asset quality positions and a strong provisioning buffer. The bank is aiming to focus on data, analytics and technology to drive growth and improve productivity and efficiency,” IIFL Securities said. On the technical side, the stock has a consolidation breakout above its lifetime high level. Currently, the stocks is up 1% at Rs 610 per share.
Target price: Rs 245
IIFL Securities said that they believe ITC is a beneficiary of nil tax increase in this budget against an 11-16% increase in the past year. ITC is a market leader across various segment with presence in businesses such as Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports. “At 14x FY23E P/E, the valuations are at a steep discount to peers and unjustified in our opinion. We believe that the nil tax increase led cigarette volume growth and FMCG performance would re-rate the stock going ahead,” they added. The stock is up trading at Rs 219 per share.
Larsen & Toubro
Target price: Rs 1,635
On the day of the Union Budget, Larsen & Toubro (L&T) was among the top Sensex gainers zooming nearly 10%. With a growth-oriented budget announced by the Finance Minister, L&T remains at the centre stage with its capability of bagging a large number of infrastructure orders. “Acceleration in domestic government project awards and improving capex sentiment of private sector (real estate & core industries) along with an infra push by the Government in the budget bode well for L&T,” IIFL Securities said. L&T is up 5% today at Rs 1,533 per share.
SBI Life Insurance
Target price: Rs 1,080
SBI Life is India’s largest private life insurer on a retail APE basis, according to IIFL Securities. The insurance space remains under-penetrated in India but many believe it could pick up pace in the aftermath of the pandemic. Technical, SBI Life Insurance has had a Cup & Handle breakout. The stock trades at Rs 875 per share.
Target price: Rs 600
Dabur is a leading FMCG player in India and has been witnessing strong growth recently, across products. “Dabur has shown strong volume growth performance among FMCG peers and yet trades at ~13% discount to HUL despite similar return profile,” IIFL Securities said.
(The stock recommendations in this story are by the respective research and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)