Finance
By: Shree1news, 02 APR 2021
BSE Sensex and Nifty 50 ended the financial year 2020-21 on a strong note, with all the sectors delivering positive returns. Amongst sectors, metals and IT registered the strongest gains while FMCG grew the slowest during the year. Stocks from the auto and realty sector also delivered solid returns during the fiscal. “While FY21 was very strong aided by cheap valuations and a low base but March was a mixed bag,” mentioned Naveen Kulkarni, Chief Investment Officer, Axis Securities. In the new financial year 2021-22, the main target will remain on earnings growth and sustenance of demand momentum.
Axis Securities has maintained its December Nifty 50 index target of 17,200. The brokerage firm mentioned that earnings growth for the entire decade from 2010-2020 was quite sluggish with an earnings CAGR of 7 per cent (doubling in 10 years). In the broader market, mid and smallcaps have outperformed the large caps by a significant margin in FY21. Domestic brokerage firm believes that this trend is likely to sustain in FY22 in addition to earnings growth is expected to be very strong for the broader market.
Prime inventory picks:
ICICI Bank: The brokerage firm has given a target price of Rs 720, a rally of 24 per cent from the current levels. Higher loan growth, improving operating profits, robust provision buffer coupled with strong deposit franchise will assist ROAE/ROAA expansion over FY22-23E for the bank.
State Bank of India: It will take SBI stock to jump 31 per cent from the previous close to hit the target price of Rs 477 pegged by Axis Securities. Amongst PSU banks, SBI stays the best play on the gradual recovery within the Indian economic system, with a healthy PCR, sturdy capitalization, a powerful legal responsibility franchise and an improved asset quality
outlook.
Federal Bank: The brokerage firm sees a 23 per cent rally in Federal Bank stock price, with price target of Rs 93 apiece. Axis Securities believes that key positives are rising retail focus, strong fee income, adequate capitalisation (Tier-1 at 13%), and prudent provisioning.
Equitas Small Finance Bank: Domestic brokerage firm believes that Equitas Small Finance Financial institution is eligible for re-rating given its improving profitability, asset quality and return ratios. It has given a goal value of Rs 72, a gain of 20 per cent from the previous shut.
Varun Beverages: With business growth restoring, aided by unlocking as witnessed in Q4CY20, Axis Securities expects the current momentum to continue. The stock has a target price of Rs 1,230, implying a rally of 23 per cent from the level of Rs1,003 apiece.
Relaxo Footwear: Relaxo Footwear has maintained healthy operating cashflows, asset turns and EBITDA margins through the years making it a capital-efficient business, mentioned the brokerage. It has a price target of Rs 1,013 apiece, gain of 15 per cent.
Camlin Fine Sciences: The brokerage firm sees an upside of 18 per cent in Camlin Fine Sciences inventory, with a target price of Rs 165. CFS is one of the world’s main and integrated manufacturers of the most most well-liked conventional antioxidants and vanillin and manufactures various other shelf-life solutions, aroma ingredients and performance chemicals.
Amber Enterprises: Healthy build-up for the upcoming season, government policy measures and support via the PLI scheme makes us believers on this structural long run story. It has a target price of Rs 3,658, a achieve of 10 per cent.
Minda Corporation: Minda Corp could be a beneficiary of migration to BS6 as the company’s product viz., wire harness (25-30% market share) would witness a sea change in share of business both in terms of value and volume. It will want a jump of 20 per cent from the earlier near hit the target of Rs 121 apiece.
Steel Strip Wheels: The increasing contribution of high margin Al-alloy wheel rims in total revenues to help margin expansion. Steel Strip Wheels had reported around 7 per cent of revenues from Al-alloy wheels in FY20 and expects to take it to 25 per cent plus over a couple of years. The brokerage firm sees a 25 per cent rally within the stock with a target price of Rs 877 apiece.
Lupin: A 20 per cent upside would be needed to take it to levels of Rs 1,225 predicted by Axis Securities. The home formulations market in India has recorded 9.5% CAGR in 2014-19 to succeed in US$ 22 bn is predicted to develop at 8%-11% CAGR to US$ 31-35 bn by 2040.
Tech Mahindra: Axis Securities believes that Tech Mahindra has a resilient business structure from a long term perspective. It has really helpful to ‘buy’ and has assigned 14x P/E multiple to its FY23E earnings of Rs 81, which provides a target price of Rs 1,116 per share.
Bharti Airtel: Bharti Airtel reported strong numbers in Q2FY21 beating consensus estimates each on monetary and working parameters. A soar of 31 per cent might be required to the touch the goal value of Rs 676.
HCL Technologies: The brokerage firm has given a target price of Rs 1,088 apiece, a soar of 11 per cent. The recent deal trend continues to be healthy for HCL tech and is reflective of traction in Retail & CPG, Manufacturing and BFSI verticals.
ACC Ltd: Stock is currently trading at 8.3x CY22E and 7.14x CY23E EV/EBITDA. Axis Securities has recommended to ‘buy’ with a target value of Rs 2,100 a share valuing the company at 10x of its CY22E EV/EBITDA.
Source:A-N
