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Contrary to expectation of a runaway rally, Samvat 2071 has been a year of consolidation for the Indian markets. Though the benchmark indices – the S&P BSE Sensex and the CNX Nifty – managed to hit the 30,000 and 9,100 levels respectively, several global and domestic concerns saw the benchmarks lose considerable ground from their peak levels.
Samvat 2072 promises to be equally exciting as investors eye the first rate hike by the US Federal Reserve (US Fed) in several years, developments in China and the euro-zone besides domestic factors like the interest rate trajectory, policy reforms by the Narendra Modi – led government and a hope of pick up in corporate earnings.
Experts maintain a positive view on the markets, as they believe that favourable macro cues such as low inflation, declining interest rates, cheap global commodities and strong governance are likely to drive improvement in corporate performance over the next 18-24 months.
India, they believe, is best placed within the emerging economies space and is likely to continue attracting higher fund inflows in the medium-term, notwithstanding any near-term global concerns.
Here is a compilation of stock recommendations for Samvat 2072 from top brokerages across the country:
Prabhudas Lilladher
Infosys
We expect Infosys to return to industry revenue growth by end FY16 and grow ahead of industry in FY17. The stock is trading attractive at ~17x FY17 EPS, we have BUY rating with target price of Rs 1,440
HDFC Bank
The bank is well placed to continually gain market share on back of its highly competitive base-rate and robust digital platform. HDFC Bank remains one of the top-picks for us and we maintain ‘BUY’ with a target price of Rs 1,200
State Bank of India
SBI has been focusing on retail segment and has gained market share in highly competitive mortgage business while it remains cautious on mid-corporate and SME segment. We retain BUY with a target price of Rs 350 which corresponds to 1.8x Mar-17 ABV.
Tata Motors
We are positive on Tata Motors and have a Buy rating with a price target of Rs518. We believe that JLR faces a short-term negative outlook due to weakness in China. However, with its strong product portfolio, JLR is in a good position to counter the slowdown there as well as increase its sale in other geographies.
Allcargo Logistics
Strong domestic presence across CFS and Project Engineering space is expected to bode well for AGL as it benefits from the domestic capex cycle recovery. AGL trades at 11.3xFY17E earnings, P/BV of 1.6x, D/E ratio of 0.11x and EV/EBITDA of 5.5x which we feel is reasonable entry point considering 20.4% CAGR PAT over FY15-FY17E period, improving return ratios and strong management bandwidth.
JK Lakshmi Cement
It is one of our top pick in the sector with a price target of Rs 450 at EV/T of US$100 FY17E capacity of 12 million tonnes
Ashoka Buildcon
We expect the EPC segment to deliver Sales and PAT CAGR of 16% and 21%, respectively, over FY15-17E and expect toll collection to grow at a CAGR of 114% over FY15-17E. We believe limited equity commitment in the current portfolio, funding from SBI Macquarie and a well-funded balance sheet makes it one of the beneficiaries of upcoming opportunities in the road sector
| KOTAK SECURITIES | |||
| Market Price (Rs) | Target Price | Upside (%) | |
| Maruti Suzuki | 4505 | 4934 | 9.5 |
| Sun Pharma | 870 | 1055 | 21.3 |
| Infosys | 1141 | 1230 | 7.8 |
| ICICI Bank | 278 | 400 | 43.9 |
| Dabur India | 271 | 308 | 13.7 |
| Praj Industries | 88 | 105 | 19.3 |
| PNC Infrastructure | 523 | 609 | 16.4 |
| Century Plyboard | 184 | 230 | 25.0 |
| Engineers India | 196 | 250 | 27.6 |
| Allcargo | 327 | 395 | 20.8 |
| Supreme Industries | 629 | 775 | 23.2 |
| Source: Kotak Securities Nov 4 report | |||
Motilal Oswal Securities
Sintex: Target price of Rs 145
Inox Wind: Target price of Rs 546
Dewan Housing: Target price of Rs 355
Sharekhan
Top picks include Bajaj Finance, Bharat Electronics, Britannia Industries, Cadila Healthcare, IndusInd Bank, Larsen & Toubro, Maruti Suzuki, Persistent Systems, Sangam India, Zee Entertainment Enterprises
Edelweiss (Fundamental desk)
Cholamandalam Finance, NIIT Limited, Tata Motors, SRF Ltd, Strides Arcolab
| ANGEL BROKING | |
| Large-caps | |
| 12-month target price (Rs) | |
| Amara Raja | 1,040 |
| Ashok Leyland | 111 |
| Axis Bank | 630 |
| HCL Technologies | 1,132 |
| HDFC Bank | 1,262 |
| ICICI Bank | 348 |
| Infosys | 1,306 |
| Larsen & Toubro | 1,646 |
| LIC Housing Fin | 571 |
| Mid-caps | |
| Inox Wind | 505 |
| Ipca Labs. | 900 |
| Jagran Prakashan | 169 |
| MT Educare | 169 |
| Radico Khaitan | 119 |
| Siyaram Silk | 1,145 |
| Surya Roshni | 183 |
| Source: Angel Broking Oct 30 report | |
