Facts have proved that February 2021 was a roller coaster of the Nifty 50 index. The index rose by 5% on the first trading day of the month and fell by 4% on the last day.
The 2020 epidemic rally is driven by FII’s large-scale purchases, which include a variety of factors such as low-interest rate mechanisms. Research and brokerage firm Axis Securities stated that rising interest rates will bring short-term challenges to the market, but India’s structural growth will remain unchanged.
The brokerage firm has raised its December target by 7% to 17,200. The company’s earnings for the October-December quarter were quite strong, with 38 of the 50 Nifty companies exceeding market expectations.
Axis Securities also increased its earnings forecasts for FY21, FY22, and FY23 by 9%, 8%, and 7% respectively. The company expects earnings to continue to recover because this is the second consecutive quarter of strong earnings growth.
Top Stock Picks:
Manappuram Finance: Manappuram Finance is one of the leading gold loan NBFCs in India. Manappuram Finance’s shares will rise 19.5% from current levels to reach the target price of Rs 207 set by Axis Securities.
ICICI Bank: This brokerage firm gave the stock an “overweight” rating with a target price of 666 rupees, which means an increase of 9%. Higher loan growth, strong provision buffer, improved operating profit, and strong deposit franchise will help the bank achieve ROAE/ROAA expansion in fiscal year 22-23.
Can Fin Homes: Can Fin Homes has a buy rating with a target price of 573 rupees, and the stock price has risen by 22%. Axis Securities predicts that as the company begins to drive growth through competitive interest rates and new geographic locations, loan growth will gradually pick up.
NOCIL Ltd.: For NOCIL to reach the target price of Rs 202, a 12% increase will be required. In the context of increasing and improving export market opportunities and attractive domestic market demand, FY22E may see a healthy performance.
Federal Bank: Private sector banks in Kerala give an “overweight” rating with a target price of 93 rupees apiece. According to the domestic research company, changing loan portfolios, strong underwriting standards, and a strong retail deposit franchise will help the valuation increase from current levels.
Varun Beverages: Axis Securities has set a target price of Varun Beverages at Rs 1,230. The healthy outlook for the upcoming season and cooperation with India’s leading and fast-growing QSR participants may push the development of Varun Beverages beverages onto a new track.
Relaxo footwear: The target price of Relaxo footwear is Rs 1,005 per piece. In the long run, given its huge growth potential, the brokerage company remains optimistic about the stock.
Amber Enterprises: The brokerage company expects Amber Enterprises shares to rise by more than 10%, with a target price of Rs 3,614 each. The near-term order outlook for RAC and mobility solutions remains strong.
Endurance Technologies: Endurance Technologies’ adjusted target price is Rs 1,714, with a return of 21%. The domestic brokerage firm said that the share of high-end bicycle bikes in the entire 2W product portfolio has been rising.
Steel strip wheels: Axis Securities has set a target price of 877 rupees, which is 36% upside from the current level. In the oligopolistic market, steel strip wheels occupy a leading position, with a market share of about 55% for steel wheel rims and about 20% for alloy wheels.
Lupin Ltd.: The target price of lupin is 1,135 rupees per share. By launching value-added products and alternative supplier strategies to reduce overall procurement costs, the pharmaceutical company has taken some measures to increase overall EBITDA profits.
Tech Mahindra: This brokerage firm believes that Tech Mahindra stock has 17% upside potential. The company’s management expects a strong recovery from supply constraints and expects to recover due to an increase in new deal wins.
Bharti Airtel: Telecom giant Bharti Airtel will ask for a 27% increase to reach the target of 676 rupees apiece. The report pointed out that the regulatory challenges are well known, and that Bharti Airtel has raised enough funds and therefore has enough capital to meet expenditures.
HCL Technologies: The target price of HCL Technologies is Rs 1,088, an increase of 17%. HCL Tech won 13 transformation deals during the quarter. Transaction wins in the quarter remained strong, with an increase of 13% from the previous quarter.
JK Lakshmi Cement: The stock’s current FY22E and FY23E EV/EBITDA are 5.5 times and 4.4x respectively trading. Axis Securities recommends “Buy” with a target price of 400 rupees per share, and JK Lakshmi Cement’s FY22E EV/EBITDA valuation is 6.5 times.
Reliance launched a new JioPhone plan
Before the spectrum auction, Jio, a subsidiary of Reliance Industries, announced its new 4G feature phone, which plans to provide 12-month and 24-month recharge and 2GB of data traffic per month, valued at Rs 1,499 and Rs 1,999, respectively.
Credit Suisse analysts said: We believe that given the upfront cost increased by 1.9 times to 2.6 times, this offer is unlikely to gain meaningful traction. Those Goldman Sachs also holds similar views.
The upfront cost of the new plan announced by Jio will limit any changes in this segment. Credit Suisse stated that, given affordability constraints, upfront costs play an important role. In general, we believe that the new offer is unlikely to have a substantial impact on Airtel and Vodafone-Idea. If anything, given the higher share of users of low-end feature phones, Vodafone Idea is more likely to cause subscriber loss.
Brokerages bullish on Bharti Airtel & Reliance Industries
In a memo before the Spectrum auction, Goldman Sachs maintained its “buy” ratings on Bharti Airtel and Reliance Industries and advised investors to sell Vodafone Idea.
The brokerage firm’s target price is 675 rupees per share for Bharti Airtel and 2,390 rupees per share for Reliance Industries. Vodafone Idea’s target price fell to 3.2 rupees per share.
Credit Suisse rated Bharti Airtel as “outperforming the market” and set its target price at 775 rupees per share. However, it rated Reliance Industries as “Neutral” with a target price of 1,930 rupees per share. Vodafone Idea’s stock rating is “underperform”, with a target price of Rs 7.5 per share.