14 largecap stocks to bet on for next one year

Top largecap stocks
1/15

Top largecap stocks

India is likely to go for 'staggered' exit post 21-day Covid-19 lockdown. Experts believe that labour shortage will be a key problem post lockdown as contract workers have migrated back to villages and it will take time for things to settle.

Industries where day-to-day capital requirements are minimal or players who are distributors of capital will bounce back faster, say Equirus Securities.

The brokerage has listed 14 largecap stocks that can offer good returns over the next one year.

Shutterstock.com
Bajaj Auto | Long | Price target: 2,752 | Target Date: Jun-21
2/15

Bajaj Auto | Long | Price target: 2,752 | Target Date: Jun-21

Covid-19 is likely to hurt income of the lower strata of society, which in turn would affect two-wheeler demand. Down-trending is also likely in entry motorcycles, benefitting Bajaj Auto. Bajaj Auto's adoption of electronic carburettors for BS-VI transition gives it room to offer discounts on BS-VI products to gain market share, else improve margins in entry segment motorcycles. And financing penetration is likely to increase going ahead, wherein Bajaj Auto has an edge due to the Direct Cash Collection scheme of Bajaj Finance.

BPCL | Long | Price target: 464 | Target date: Jun'21
3/15

BPCL | Long | Price target: 464 | Target date: Jun'21

Crude prices are expected to remain low until Opec+ reaches a unanimous conclusion for production cuts. Lower crude prices bode well for Indian refiners with benefits in the form of lower fuel losses and reduced working capital requirements. Gradual price cuts will ensure higher marketing margins, which will offset weaker refining margins and one-time inventory losses. BPCL’s stock price has seen the steepest correction amongst all Indian refiners, thus ignoring the divestment trigger.

Britannia | Long | Price Target: 3,431 | Target Date: Sep'21
4/15

Britannia | Long | Price Target: 3,431 | Target Date: Sep'21

Britannia has 100% of its portfolio in the foods segment where demand under current conditions remains strong, even as supply chain disruptions have emerged. Industry interaction indicates that labour issues are likely to persist till Q1FY21 with more disruptions in casual labour now.

PTI
Dabur | Long | Price Target: 490 | Target Date: Sep'21
5/15

Dabur | Long | Price Target: 490 | Target Date: Sep'21

Dabur’s supply in the current environment would be mainly in juices, Chyawanprash, and honey. Equirus Securities expects Dabur’s personal care portfolio to be hit in the near term, which will impact revenues going into FY21. The company is among the better plays in current conditions, thereby emerging stronger once things stabilize.

Shutterstock.com
HDFC Bank | Long | Price Target: 1,135 | Target date: Mar-21
6/15

HDFC Bank | Long | Price Target: 1,135 | Target date: Mar-21

HDFC Bank’s retail as well as corporate customer base is likely to be more resilient than that of peers in navigating through the current challenging times. Equirus Securities believes HDFC Bank is a strong franchise currently available at decade-low valuations.

ICICI Bank | Long | Price Target: 500 | Target Date: Mar-21
7/15

ICICI Bank | Long | Price Target: 500 | Target Date: Mar-21

Equirus Securities believes ICICI Bank is better placed versus peers on account of its cautious incremental corporate lending in the past few years and contained share of unsecured retail/SME loans. ICICI Bank will benefit on the liabilities front led by its diverse savings retail customer base in the near term.

Reuters
Infosys | Long | Price Target: 782 | Target Date: Mar-21
8/15

Infosys | Long | Price Target: 782 | Target Date: Mar-21

New emerging technologies including automation, AR/VR, cloud, IoT and analytics (bunched as digital) have been driving growth for Infosys (INFO) recently, as large investments have paid off handsomely. While digital offerings stand now over 40% of revenues (7.5% CQGR over last 10 quarters), deal wins have also been strong with TTM deals wins at $8.9 billion (up 58% YoY) largely in digital transformation.

Maruti Suzuki | Long | Price Target: 4,966 | Target Date: Jun-21
9/15

Maruti Suzuki | Long | Price Target: 4,966 | Target Date: Jun-21

Equirus Securities believes dealer strength is important during the current lockdown and post lockdown period, when economic activity will be muted. MSIL scores over peers in this regard as its dealers are stronger given the company’s domestic leadership. Although sales recovery would take a while, servicing income will revive faster and MSIL dealers are set to benefit more versus peers.

PTI
Petronet LNG | Long | Price Target: 275 | Target Date: Jun'21
10/15

Petronet LNG | Long | Price Target: 275 | Target Date: Jun'21

Lower crude prices have pushed down prices of contracted volumes, significantly narrowing the gap with spot LNG prices. This will ensure increased share of contracted volumes in PLNG’s sales mix. Lower LNG prices will lead to strong demand from stranded gas-based power plants, in turn reducing competitive intensity from Mundra. Volumes will take a hit in AprilMay due to lower economic activity but should rebound going forward.

Siemens | Long | Price Target: 1,329 | Target Date: Jun-21
11/15

Siemens | Long | Price Target: 1,329 | Target Date: Jun-21

Siemens has corrected around 30% over the last two months due to global supply chains being hit by the pandemic and domestic demand taking 3-6 months to normalize post the lockdown, likely leading to revenue loss and margin pressure in the near term.

Getty Images
Shree Cement | Long | Price Target: 18,734 | Target Date: Mar-21
12/15

Shree Cement | Long | Price Target: 18,734 | Target Date: Mar-21

Shree Cement stock has corrected around 32% in the last one month since the outbreak. The country’s construction sector will be impacted for the next 6 months. Upon demand recovery, Shree Cement should be able to see volume growth due to its strong presence in a relatively stable market of North India while capacity commercialization in eastern/western India should aid incremental volume growth.

Shutterstock.com
Sun Pharma | Long | Price Target: 471 | Target Date: Jun'21
13/15

Sun Pharma | Long | Price Target: 471 | Target Date: Jun'21

Sun Pharma has corrected by 13% over the last three months owing to regulatory overhang on Halol, a gradual ramp-up in specialty products and a dearth of high-value generic launches in the US market in the recent past. Sun Pharma has a strong generic pipeline for the US market, which includes niche ANDAs such as gAmbisome, gNasonex, gPentasa, gLupron depot, gVenofer and gAsacol HD.

Reuters
Tech Mahindra | Long | Price Target: 709 | Target Date: Mar-21
14/15

Tech Mahindra | Long | Price Target: 709 | Target Date: Mar-21

Tech Mahindra should post solid growth via the inorganic route (5 acquisitions in FY20E), communications revival with strong Enterprise and $2.7 billion of large deal wins in the last two quarters. While recent growth was led more from enterprise businesses, commentary around communications was bullish amid increased spends around 5G rollouts across many developed economies.

Ultratech Cement | Long | Price Target: 3,695 | Target Date: Mar-21
15/15

Ultratech Cement | Long | Price Target: 3,695 | Target Date: Mar-21

Ultratech Cement stock has corrected 28% in the last one month. The country’s construction sector will be impacted for the next six months, yet once demand recovers, Ultratech should be better placed to see volume growth due to its stronger presence in Central, North & West India. Ultratech Cement's fuel mix should help it benefit from a correction in pet-coke/diesel prices in FY21.

Shutterstock.com

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service

X
User