Friday marked the begging of the new year 2021. After the turbulent journey that stock markets charted in 2020, equities are now costly as Dalal Street reached fresh all-time highs. Domestic brokerage and investigation firm Axis Securities believes that the new year will see the revival of development. In a current note, Axis Securities stated that the essential themes for 2021 will be dominated by digital, healthcare and telecom plays although smaller and midcap stocks march greater and greater. Keeping such trends in thoughts, the brokerage firm has listed nine stocks that it believes could develop this year.
Colgate Palmolive
Target value – Rs 1,745
The firm has a powerful marketplace share of more than 50% in the Indian toothpaste marketplace. Colgate Palmolive runs an oral care segment and a private care segment. The firm has stated that it will not compromise on volume development and nevertheless keep competitive positioning in the marketplace by a judicious balance involving pricing and volumes, according to Axis Securities. “Colgate cashed in on the Natural’s tailwind momentum and increased reach of its Naturals portfolio by 2x outlets. Naturals portfolio’s household penetration increased by 70bps YTD,” the brokerage firm stated. Shares of the firm closed on Friday at Rs 1,577 per share, translating 11% upside prospective.
Infosys
Target value – Rs 1,404
India’s second-biggest IT services firm has a powerful presence across geographies. The management of Infosys has revised its guidance upwards to 2%-3% from %-2% previously for income development in CC terms for the existing fiscal year. Deal wins stay powerful for Infosys and so deal its deal pipeline. The IT key lately won a $3.2 million contract from Daimler which will see the latter transform its IT operating model and infrastructure landscape across workplace services, service desk, information centre, networks and SAP Basis collectively with Infosys. Currently, Infosys trades at Rs 1,260 which benefits in 12% upside for the target value.
Bharti Airtel
Target value – Rs 676
The telecom key has noticed a pickup in connections lately and even the stock has zoomed 29% in current months immediately after a lengthy period of deterioration. “Airtel has launched various products for enterprise as it is trying to leverage growth from ‘Work from Home’. Its key launches include Airtel Blue Jeans, Airtel Secure, Airtel Cloud and Airtel IQ for B2B customers,” the report stated. The telecom firm has continued to diversify its offerings and becoming a answer provider continues with its providing in Cloud, safety, information centres and CPaaS options. Bharti Airtel’s shares closed at Rs 515 apiece on Friday. Upside prospective for the target value is 31%.
Relaxo Footwear
Target value – Rs 925
The company’s goods consist of rubber/EVA slippers, canvas footwear, sports footwear, sandals, college footwear and leather footwear, Axis Securities stated. “Relaxo has maintained healthy operating cash flows, asset turns (~3x) and EBITDA Margins over the years making it a capital-efficient business,” they added. Growth fro Relaxo Footwear is to be driven by additional capital expenditure. “Despite slowdown company is moving forward with its capex plan of adding additional capacity of one lakh pairs per day at its Bhiwadi plant with estimated capex of Rs 90 crore owing to the strong demand seen for Flite PU and Sparx brands.” The stock trades at Rs 800 per share, translating to a 16% upside.
Amber Enterprises
Target value – Rs 2,800
Amber has a powerful marketplace share in the Air Conditioner marketplace. The firm caters to 49% of client requirement for outside units, 78% for Indoor units and 60% for Window AC’s. The firm remains a essential play on the PLI theme that, several think, will provide India’s industrial sector with the needed push. “Amber is well-positioned to quickly scale up its operations and capture the opportunity under any PLI scheme announced by the government, as currently a large proportion of AC components and ACs are being imported,” Axis Securities stated. The brokerage firm sees 18% upside prospective.
Ujjivan Small Finance Bank
Target value – Rs 47
The SFB transitioned from NBFC in 2017 and now cater to low and middle-revenue category men and women and companies. “We believe that the fast-paced diversification from a micro financier to a small finance bank and the recent ramp up in the liability franchise after a slow start augur well for the bank,” the brokerage firm stated. The target value of Rs 47, would outcome in 20% upside from existing levels.
Star Cement
Target value – Rs 115
Located in the national capital area, Star Cement is the biggest cement firm in the area. The North-East area contributes 75% of total income with powerful brand visibility which enables the firm to appreciate premium pricing in the area, according to the report. Financially, Star Cement has a healthful position with low debt and powerful return ratios. Analysts at Axis Securities anticipate the firm to increase its EBITDA margins from 20.6% in FY20A to 23.9% in FY23E. An upside of 13% is becoming noticed for the stock to attain its target value.
Solara Active Pharma Sciences
Target value – Rs 1,350
API was the theme for 2020 and it does not look to be dying down any time quickly. Solara Active Pharma is a worldwide pure-play API player with 80+ industrial APIs. “Solara has the highest gross margins ~57% in the industry that reflects the company has pricing power and value-added products in the portfolio,” Axis Securities stated. The API theme will also be a essential point to watch in 2021 as it aligns with the PLI theme. To attain the target value the stock could rally 14% from existing levels.
NOCIL
Target value – Rs 176
NOCIL is a leader in the domestic rubber chemical compounds marketplace with ~40% share and ~5% worldwide marketplace share. “ We note there has been a significant improvement in the overall business from H2FY21, volumes and pricing are seeing an improving trend which is expected to improve significantly in FY22 on the back of new capacity commercialization, rising new product contribution and low base,” Axis stated. The brokerage firm sees 22% upside for the stock.