Domestic markets may well be seeing some correction but are nevertheless trading at levels greater than their pre-coronavirus highs. Yesterday’s fall, analysts say, was aided by the threat of the new strain of the coronavirus in the United Kingdom though investors had been hunting for a explanation to book their earnings. But with the year ending quite a few even think that investors are closing their positions for this year and preparing their trades for 2021. In the coming year, HDFC Securities believes that if Nifty rises substantially, the move would be gradual and measured. Here are the prime stocks picks by HDFC Securities for 2021.
Bandhan Bank
The private sector lender is at the moment trading at Rs 386 per share, following producing a sturdy comeback from yesterday’s lows. Analysts at HDFC Securities see the bank’s market place share, with a higher base in North-East India as a constructive. “It has consistently demonstrated a strong track record in growing its balance sheet/earnings (AUM grew by CAGR 44% FY10-20). As on FY20, its total customer base stood at ~20mn customers with a loan book of Rs 76k crore,” the report stated. Bandhan Bank could see a sharp uptick in competitors in the coming years with more MFI players expanding their base.
Birla Corporation
With a 4.2% market place share in the cement market, Birla Corporation has a sturdy presence in central, northern states along with West Bengal and Maharashtra. “The company has finalised a plan to scale up its capacity to 25 MTPA by 2025 from the current capacity of 15.6 MTPA, which provides strong visibility of future growth,” HDFC securities stated. Concerns for the firm stem from concerns about its management and any weakness in cement rates. The stock trades at Rs 677 apiece.
GAIL
GAIL is working on plans to expand into petrochemicals, speciality chemical compounds and renewables to supplement development in its core company of organic gas advertising and transportation, a constructive for the firm going forward. GAIL also plans to invest more than Rs 45,000 crore more than the subsequent 5 years to expand the National Gas Pipeline Grid and city gas distribution network. GAIL’s share value is trading at Rs 117 per share.
HPCL
The state-owned OMC has a wide advertising and distribution network, like cross-nation pipelines and 16,707 retail outlets. “HPCL plans to invest more than Rs 60,000 crore in the next five years to build and develop infrastructure, including the implementation of significant projects such as the capacity expansion at its refineries, expansion of its pipeline network, and setting up of new pipelines,” HDFC Securities stated though adding that BPCL divestment could lead to a rub-off impact on HPCL’s valuations. Maintaining margins remains important for the firm. Stocks of HPCL had been trading at Rs 207.
Hindustan Unilever Limited
HUL shares had been trading flat on Tuesday at Rs 2,299 per share. The FMCG key is the major player in the category. “The company is debt-free and cash-rich (~Rs.5113 cr cash as of FY20) after recent acquisitions of GSK’s consumer business. We expect substantial synergy benefits to play out in the next 2-3 years,” the report stated. Commodity value fluctuations are a important concern for the stock.
Infosys
The Information Technology giant was trading at Rs 1,187 per share on Tuesday morning. The firm has a sturdy deal pipeline. In the earlier quarter, Infosys announced huge deal wins with a total contract worth of $ 3.15b, which is the highest ever recorded in the fiscal second quarter. Infosys as well is a debt absolutely free firm creating healthier money. The concern for Infosys stems from weakness emerging for customers of the firm which may well outcome in delays for Infosys.
ONGC
“The recent rise in crude oil prices and the expected uppishness therein is not fully reflected in the current valuations of ONGC,” stated analysts at HDFC Securities. The typical capex of ONGC per annum has been in the variety of Rs 30,000 to Rs 32,000 crore. The brokerage firm stated that ONGC acquisition of a majority stake in HPCL is a defining move – 1 that drastically transforms its downstream portfolio. The decline in production in its mature fields more than the current previous is a important concern going forward.
State Bank of India
India’s biggest public sector lender is also amongst the stocks that HDFC Securities has picked for the coming year. “SBI is almost immune to any liability-side risks at this juncture, given its expansive, granular deposit base and government’s majority holding. It is better placed to deal with asset quality worries than many other large banks because of the quality of its loan book,” the brokerage firm stated. Delay in resolutions of negative loans is one thing that could effect State Bank of India’s functionality. SBI share value was trading at Rs 252 apiece on Tuesday.
Sun Pharma
The biggest pharmaceutical firm in India with a sturdy 8.2% market place share has 31 brands amongst prime 300 brands in IPM. Over the previous 6 years, Sun Pharma has produced Rs 12,600 crore worth of R&D investment. “We think that in the subsequent 2-3 years, Sun Pharma’s superior earnings development will be driven by regulatory resolutions, moderating value erosion and quite a few item launches across generic and speciality categories. A slower ramp-up in the speciality portfolio is a concern. Sun Pharma’s shares had been trading at Rs 559 per share.