Indian share markets witnessed a correction earlier this week on the back of new COVID strain located in the UK. Headline indices BSE Sensex and the broader index Nifty 50 have rallied more than 80 per cent from their respective March lows till December 21, 2020. According to the analysts at ICICI Direct Research, Nifty witnessed a V-shaped recovery post a 40 per cent correction, on the back of a host of good news flow in 2020. The brokerage firm expects Nifty to stay in a structural bull phase with an upside target of 16,200 that is implied by the 3 year’s consolidation breakout (12200-8000). “Within the bull phase, a normal correction of 15-20% cannot be ruled out. However, such a correction should not be construed as negative,” it mentioned.
The brokerage firm also sees Midcaps to lead equity outperformance in the calendar year 2021. It mentions that Indian midcaps and compact caps have a powerful correlation with created marketplace peers. As US and European midcap indices have currently breached their multi-year highs, ICICI Direct Research expects secular outperformance to comply with from Indian midcaps. The brokerage report noted that more than the previous 4 decades, international equities have often generated good returns in a year following US elections, wherein BSE Sensex gained an typical 37 per cent. “We expect rhythm to be maintained in CY21,” it mentioned.
Technical stock picks for 2021
Infosys: As the IT sector has been a key outperformer in the calendar year 2020, the brokerage firm expects the similar efficiency subsequent year also. Digital acceleration, significant deal wins vendor consolidation and expense rationalisation stay essential extended term drivers. It expects the stock to extend the existing rally and head towards Rs 1,410 in CY 2021, an 18 per cent upside.
United Spirits: The brokerage firm noted that choose-up in consumption due to the festive season and opening of on-trade channels stay essential triggers for the stock, along with extended term trend of dwelling delivery of alcohol, going ahead. It sees the stock to resolve greater and head towards the target of Rs 660 in coming quarter, implying a 20 per cent rally.
Bharat Electronics Ltd: BEL has envisaged escalating contribution from non-defence segment to from existing 7 per cent of income to 15- 20 per cent more than the subsequent 3 to 5 years. During the second half of the calendar year 2020, the defence sector witnessed a powerful shopping for demand. ICICI Direct Research expects it to accelerate upward momentum towards Rs 140, a jump of 27 per cent.
Relaxo Footwears: In the existing set-up of work-from-dwelling, sales of sandals and flip flop have witnessed a considerable surge in demand. It will take Relaxo Footwears to jump 27 per cent to touch the target of Rs 985 pegged by the brokerage firm.
Dr Lal PathLabs: The brokerage report highlighted that lean balance sheet, powerful margins profile and healthier return ratios are some of the legacy attributes for the corporation. In the coming quarters, ICICI Direct Research expects it to head towards Rs 2,840, rallying 31 per cent.
Timken India Ltd: The report pointed out that the railway segment has emerged as 1 of the essential contributors to Timken India’s topline in current instances. The brokerage firm sees it increasing to Rs 1,360 apiece, supplying returns of up to 26 per cent in the subsequent year.
Can Fin Homes: ICICI Direct Research mentioned that the NBFC sector has resumed its key uptrend just after a corrective decline of the final 3 years. Can Fin Homes has powerful capital adequacy that would allow the corporation to push for development as scenario improves and possibilities boost. It forecasts the stock to accelerate up move and head towards Rs 580 apiece, an upside of 27 per cent.
(The stock suggestions in this story are by the respective investigation and brokerage firm. TheSpuzz Online does not bear any duty for their investment assistance. Please seek the advice of your investment advisor prior to investing.)