Top stocks to buy: Axis Bank, Dr Reddy’s among 5 stocks that may rally 22% in new year 2021

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January 4, 2021 2:00 PM

On the market outlook in the New Year 2021, the brokerage firm expects the momentum to be maintained given the ultra-loose monetary policies of global central bankers.

stocks to buy, axis bank, wipro, bajaj autoThe new year is also expected to witness a strong recovery in global GDP due to the low base effect.

Continuing the gaining streak, Indian share markets are trading at record high levels. In today’s session, BSE Sensex crossed the crucial 48,150 level, while the broader Nifty 50 index was ruling above 14,100. Research and brokerage firm SBICap Securities said that the world has witnessed a new challenge with an outbreak of Covid-19 pandemic at the outset of the year 2020. Last year, economic activities were brought to a complete halt and economies shrunk in negative. On the market outlook in the New Year 2021, the brokerage firm expects the momentum to be maintained given the ultra-loose monetary policies of global central bankers. The new year is also expected to witness a strong recovery in global GDP due to the low base effect. SBICap Securities has suggested five stocks to buy in the new year which have an upside potential of up to 22 per cent.

Axis Bank: The brokerage firm noted that Axis Bank is trading at the lowest 1.9x of its TTM P/Bv while its GNPA (4.1%) is lower than ICICI Bank (5.5%). On a one year forward earnings, the bank is trading at 1.9x when compared with ICICI and HDFC bank. On a 1 Yr forward book, the stock is trading at 1.8x. The brokerage firm has given a target price of Rs 697, implying a gain of 12.3 per cent.

Bajaj Auto: Bajaj Auto has a strong business risk profile, established market position with market-leading products and a rising consumer preference for personal mobility which will drive demand for its 2W segment. It will take Bajaj Auto to jump 16.4 per cent to hit the target price of Rs 4,010 apiece. At the current price, the stock is trading at a 1-Yr forward P/E of 18.8x, the brokerage firm noted.

Dr. Reddy’s Laboratories: From the technical point of view Dr. Reddy’s Laboratories has witnessed a breakout from a rounding bottom formation on the monthly chart and it expected to move towards its projected target around 6350 zone. It will require a rally of 22 per cent to reach Rs 6,343 predicted by SBICap Securities.

Route Mobile: The brokerage highlighted that Route Mobile has completed several acquisitions and strategic investments in recent time which will allow the company to remain upgraded with the current requirement in the market and in turn acquire new larger accounts. At current price, the stock is trading at a 1-Yr forward P/E of 80.2x. The target price for Route Mobile is Rs 1,279, implying a return of 16.4 per cent.

Wipro: The IT bellwether, Wipro, has continuously posted strong margin growth at 27% (rise of 58bps QoQ; 136bps YoY in Q2FY21) led by higher utilization and low variable cost which is expected to continue with the new CEO’s focus on profitable growth. According to the brokerage firm, at the current price, the stock is trading at a 1-Yr forward P/E of 20.2x which is lower when compared with other large playerslike TCS and Infosys. The brokerage firm sees 17.3 per cent upside for the stock.

(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.)

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