The Indian stock market’s performance in August showed resilience with NSE Nifty 50 recovering by 16 per cent from the bottom touched on on 17th June. In broader markets, both mid and small cap indices, too, recovered by 22% and 18% for the same period, respectively. Axis Securities in its report noted that the recovery was led by positive FII flows and a robust earning season. The Research and brokerage firm has maintained Nifty’s March 23 target at 18,400 intact. Analysts have suggested to buy 7 large cap stocks — ICICI Bank, SBI, Maruti Suzuki, Coal India, among others to pocket up to 25 per cent gains in 18 months.
Axis Securities continues to maintain a positive long-term outlook on the market, supported by a favourable structure emerging with increasing Capex enabling banks to improve credit growth. “We foresee FY23/24 NIFTY EPS at 820/929. After Q1FY23, we marginally change our FY23/24 expectations by -0.7%/1% and stand conservative at 4%/7% below street expectations. We maintain our Nifty Mar’23 target of 18,400 by valuing it at 20X on FY24 earnings vs. 22X earlier,” it added. Axis Securities recommends investors use such dips in a phased manner to build a position in quality companies with an investment horizon of 12-18 months.
Large cap stocks to buy
Target: Rs 1,000 | Upside: 13%
Analysts say that ICICI Bank has been outperforming its peers and has been firing on all cylinders. ICICI Bank has ticked most boxes on growth, margins, and asset quality. Higher loan growth, improving operating profits, and a strong provision buffer coupled with a strong deposit franchise will help the bank achieve ROAE/ROAA expansion over FY23-25E. On the valuation front, it believes the bank continues to be on a comfortable footing.
Target: Rs 262 | Upside: 12%
Analysts said that higher international coal prices and volume growth and CIL’s focus on closing the non-profitable manpower intensive high cost underground coal mines and expanding the large open cast mines will drive the profitability.
Target: Rs 1,200 | Upside: 12%
Analysts believe Tech Mahindra has a superior services mix and multiple long-term contracts that are well-spread across the verticals, reducing its dependency on any one vertical. Furthermore, it foresees healthy tractions in Communications and Enterprise verticals which will greatly accelerate the company’s revenue growth moving forward.
Maruti Suzuki India
Target: Rs 10,270 | Upside: 13%
Analysts say that Maruti Suzuki has a stronghold in the entry-Level segment and with recent launches in the compact (All-New Brezza) & mid SUV (Grand Vitara) segment it seems to be moving towards regaining lost market share by FY25E. It expects a rise in demand from new launches along with upgradation of existing product portfolio, softening commodity inflation and improving ECU shortages to support recovery in the margins. The company would gain further market share, driven by an expected shift towards petrol, CNG and hybrid vehicles.
State Bank of India
Target: Rs 665 | Upside: 25%
Amongst the PSU banks, SBI remains the best play on the gradual recovery of the Indian economy on account of its healthy PCR, robust capitalization, strong liability franchise, and an improved asset quality outlook. Analysts believe normalization in credit costs and improved growth outlook should lead to double-digit ROEs.
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