Indian stock markets are riding at record high levels, contrary to what it was looking when COVID-19 pandemic hit. BSE Sensex and Nifty 50 surpassed their pre-covid levels and have zoomed over 80 per cent from their 52-week lows touched in March this year. Analysts at Samco Securities said that the stock markets have always been forward-looking, marching up significantly sensing that the things would be near normal as we move into next year getting a boost from the medicine that looks very much insightful. The brokerage firm has jotted down 10 stock ideas that are expected to be rewarding while moving in the new year.
1. HCL Technologies: With a ‘buy’ rating to stock, Samco Securities sees14 per cent upside in the share at a price target of Rs 1,006 apiece. The brokerage firm sees that overall performance reported by the company has been quite healthy, a well- balanced capital allocation strategy through a combination of capital expenditure, dividends and acquisitions.
2. Axis Bank: Samco Securities sees a 32 per cent rally in the stock, with a target price of Rs 802 apiece, in eight to 10 months time frame on target P/BV of 2.18x and FY21 (E) BVPS of Rs 367.68. According to the brokerage, on the back of strong operating metrics, stressed asset resolution, balanced moratorium books as compared to its peers and robust return ratios, the stock is expected to move.
3. Hindustan Zinc Ltd: The firm has given a ‘buy’ rating with a target price of Rs 297 apiece. It will take Hindustan Zinc to jump 23 per cent from Rs 242.10 to hit the target pegged by the brokerage firm in eight to 10 months on a four year average P/E of 14x and FY22 EPS of Rs 21.20. The management is setting up Hindustan Zinc for its next phase of growth and is confident to deliver superior value.
4. Bank of Baroda: The bank stock is expected to rise 20 per cent in eight to 10 months’ time frame with a price target of Rs 80 apiece. The bank is conscious that the stresses caused by COVID-19 is going to have an impact, but the bank believes slippage ratio will be lower than last year as the bank is not exposed to many chunky potential NPAs.
5. Mphasis: The brokerage firm sees a gain of 18 per cent in the stock price in next eight to 10 months investment horizon. The brokerage firm said that the company has been doing very good and good growth in deal wins since the last two to three quarters and a healthy deal pipeline would drive growth for the company in coming quarters.
6. Alembic Pharmaceuticals: It will take Alembic Pharmaceuticals Ltd stock price to jump 23 per cent to hit the target of Rs 1,355 apiece. According to the brokerage firm, with the strong position in the domestic formulations market, growing presence in the international generics segment, and healthy financial performance, the company is expected to see good growth going forward.
7. Prestige Estates Projects Ltd: Samco Securities has given a target price of Rs 349, a 25 per cent upside. It says that considering its attractive valuation which is supported by a strong portfolio of operational rental assets, thereby reducing the risks associated with the residential segment, and a planned increase in commercial and retail properties, it is expected that the company would see good growth going forward.
8. Finolex Cables: The target price for Finolex Cables is Rs 447, a 23 per cent rally. Samco Securities said that the company continues to focus on areas critical to better financial performance such as cost control, improved asset utilization, reduce debt levels, and overall improvement in productivity is expected to lead to a stronger balance sheet in the years to come.
9. Kalpataru Power Transmission Ltd: A 21 per cent upside would be needed to take it to levels of Rs 387, predicted by Samco Securities. The brokerage firm said that the company’s operating and financial performance has improved significantly over the previous quarter given relaxation of lockdown, improved labour availability and restored normalcy of supply chains.
10. KNR Constructions Ltd: The brokerage firm has given a target price of Rs 418, potential upside of 32 per cent. The report noted that the strong balance sheet gives it a key competitive advantage v/s peers in bidding for newer projects, and in terms of strong execution despite financing challenges in the sector as the dependency on bank financing is minimal.
(The stock recommendations in this story are by the respective research and brokerage firm. The Outlooker Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)