Axis Securities, a brokerage, is bullish on the top 16 large-, mid- and small-cap stocks, despite ongoing concerns over global turmoil.
The brokerage noted that “March 22 is expected to be an eventful month marked by the FED meeting, national election results and the LIC IPO. In addition, the direction of oil prices, bond and dollar index yields as well as the development of the current geopolitical events will further influence market fundamentals. inflation and the central bank’s view on the number of rate hikes in the current calendar year. The Fed’s stance at the upcoming FOMC meeting would be the deciding factor for the overall market direction short term. In the current environment, oil will be the dominant consideration in the FED’s analysis of the current situation. On the possibility of a reduction in global growth, the FED could slow ir the pace of rising rates. But we cannot rule out the possibility of an aggressive stance from the Fed if it forecasts a stronger pick-up in inflation.
Axis Securities said “Volatility as measured by India VIX, traded in a range of 19-21 for most of Feb 22. However, it peaked in the last week, particularly on Feb 24 after the announcement of Russia inflicting a military attack on Ukraine. The ensuing panic was reflected in the market as volatility rose sharply and India’s VIX closed at the 32 level (February 24, 2019). ), which is above the long-term average of 22. This clearly indicates the depth of the panic that has intensified selling across the market. to end in a concrete direction.And any further increase in volatility from current levels will pose a short-term risk to the market, making the direction of volatility a critical factor for long-term performance. rt market term.”
The brokerage says that “large caps will find short-term advantage: we believe that style and sector rotation have been the key factors in delivering satisfying returns going forward. The quality theme has been the most strong performer over the past month as geopolitics Tensions have boosted market volatility Value and Momentum themes have been our best performing styles over the past three months and value continues to be a robust theme over a time horizon slightly longer time frame. As the economy improves, Value stocks will see a significant improvement in the financial matrix. Selected value stocks under the Metals, Commodities and BFSI space are well positioned to deliver performance higher, especially when we take into account the recent market correction.
“The Quality theme may outperform the broader market from current levels given a notable market correction and significantly increased volatility over the past three months. therefore, large caps will find an advantage in the broader market in the near term. Once the heat between Russia and Ukraine subsides, value should emerge in the small and mid cap space, providing opportunities for attractive investment in the broader market as the earnings outlook remains constructive,” he added.
According to the brokerage “We maintain a shrewd target of 20200: we continue to have a positive long-term view on the market, supported by the emerging favorable structure, as increased capital expenditure allows banks to improving credit growth Union Budget 2022-23 spending will help generate broad-based growth in FY23. for the current quarter, it continues to be the critical driver of market performance moving forward NSE 500 universe rolling cumulative net profit for the last 4 quarters reaching an all-time high (crossed 9 Lc Cr at Q3FY22) is a key positive for the market. We expect FY22/23/24 Nifty EPS at 728/844/918 with CAGR growth of 20% in FY21-24. We maintain our target NIFTY50 from December 22 of 20200, valuing it at 22x earnings for fiscal year 24 E.”
“Based on the above themes, we recommend the following actions: ICICI Bank; Bajaj Auto; Tech Mahindra; Maruti Suzuki India; State Bank of India; Hindalco Industries; Bharti Airtel; Federal Bank; Varun Beverages; Ashok Leyland; National Aluminum Company; Bata India; Krishna Institute of Medical Sciences; Equitas Small Finance Bank; Praj Industries; CCL Products (India),” Axis Securities said.
Top picks by Axis Securities
|Sr No.||Category||Company||Target price in Rs|
|1||large cap||ICICI Bank SA||990|
|2||large cap||Bajaj Auto Ltd||4,250|
|3||large cap||Tech Mahindra Ltd||2,060|
|4||large cap||Maruti Suzuki India Ltd||9,800|
|5||large cap||National Bank of India||720|
|6||large cap||Hindalco Industries Ltd.||630|
|7||large cap||Bharti Airtel Ltd||810|
|8||Average capitalization||Swiss Federal Bank Ltd||125|
|9||Average capitalization||Varun Beverages Ltd.||1,080|
|ten||Average capitalization||Ashok Leyland Ltd||160|
|11||Average capitalization||National Aluminum Company Ltd.||150|
|12||Average capitalization||Bata India Ltd||2,200|
|13||small cap||Krishna Institute of Medical Sciences||1,600|
|14||small cap||Equitas Small Finance Bank||80|
|15||small cap||Praj Industries Ltd||477|
|16||small cap||CCL Products (India) Ltd||585|
|Source: Axis Securities|
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Article first published: Friday, March 4, 2022, 10:41 a.m. [IST]