Finance Minister Nirmala Sitharaman has forced the bulls to take charge as soon as once again with her Union Budget. Dalal Street is saluting the ‘no negative’ spending budget that the government has delivered with Sensex reclaiming 50,000 and Nifty breaching 14,700. But the query remains exactly where must investors place their income to illicit wholesome gains from the resumed rally that Sensex and Nifty look to be charting on. The Budget is a development-oriented one, with an aim of maintaining India on the development trajectory as it emerges out of a pandemic. Here are the stocks IIFL Securities believes could do nicely.
ICICI Bank
Target cost: Rs 670
The private sector lender has demonstrated sturdy development in its quarterly outcomes. “ICICI Bank, India’s second-largest private bank, is among the few banks that have manageable asset quality positions and a strong provisioning buffer. The bank is aiming to focus on data, analytics and technology to drive growth and improve productivity and efficiency,” IIFL Securities mentioned. On the technical side, the stock has a consolidation breakout above its lifetime higher level. Currently, the stocks is up 1% at Rs 610 per share.
ITC
Target cost: Rs 245
IIFL Securities mentioned that they think ITC is a beneficiary of nil tax improve in this spending budget against an 11-16% improve in the previous year. ITC is a market place leader across a variety of segment with presence in corporations such as Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports. “At 14x FY23E P/E, the valuations are at a steep discount to peers and unjustified in our opinion. We believe that the nil tax increase led cigarette volume growth and FMCG performance would re-rate the stock going ahead,” they added. The stock is up trading at Rs 219 per share.
Larsen & Toubro
Target cost: Rs 1,635
On the day of the Union Budget, Larsen & Toubro (L&T) was amongst the leading Sensex gainers zooming almost 10%. With a development-oriented spending budget announced by the Finance Minister, L&T remains at the centre stage with its capability of bagging a massive quantity of infrastructure orders. “Acceleration in domestic government project awards and improving capex sentiment of private sector (real estate & core industries) along with an infra push by the Government in the budget bode well for L&T,” IIFL Securities mentioned. L&T is up 5% today at Rs 1,533 per share.
SBI Life Insurance
Target cost: Rs 1,080
SBI Life is India’s biggest private life insurer on a retail APE basis, according to IIFL Securities. The insurance coverage space remains beneath-penetrated in India but lots of think it could choose up pace in the aftermath of the pandemic. Technical, SBI Life Insurance has had a Cup & Handle breakout. The stock trades at Rs 875 per share.
Dabur India
Target cost: Rs 600
Dabur is a top FMCG player in India and has been witnessing sturdy development not too long ago, across solutions. “Dabur has shown strong volume growth performance among FMCG peers and yet trades at ~13% discount to HUL despite similar return profile,” IIFL Securities mentioned.
(The stock suggestions in this story are by the respective investigation and brokerage firms. TheSpuzz Online does not bear any duty for their investment guidance. Please seek the advice of your investment advisor just before investing.)