India’s economy is at a sweet spot for growth and remains a place of stability amidst global economic turmoil, said Axis Securities, which continues to believe the long-term growth story for Indian equities is supported by a favorable structure as capital spending ramps up, banks Can improve credit growth.
“The strong earnings trajectory continues across the Nifty 50 universe. We expect NIFTY EPS to grow by 11%/14%/13% in FY23/24/25. Hence, we revise up our NIFTY targets to 20,400 in December 2023, valuing it at 20 times December 2024 earnings, implying a 9% upside from current levels,” the report said.
While the mid- to long-term outlook for the overall market remains positive, the brokerage said we could see short-term volatility with the market reacting in either direction. In this case, the current setup is a “buy the dip” market. “We advise investors to maintain good liquidity (10%) and take advantage of this downside opportunity in phases to build positions in quality companies (very high earnings visibility) with an investment horizon of 12-18 months,” it advised.
Based on the above themes, brokerages recommend the following stocks as their top picks for December, including ICICI Bank, with a target price of ¥1,150, Tech Mahindra (TP: ¥1,300), Maruti Suzuki India (TP: ¥10,600), State Bank of India or SBI (TP: ¥740).
It is also in Dalmia Bharat (TP: ¥2,070), Commonwealth Bank (TP: ¥155), Valen Drink (TP: ¥1,400), Ashok Leyland (TP: ¥175), Infosys (TP: ¥1,900), PNC infra (TP: ¥340), APL Apollo Tube (TP: ¥1,240), HealthCare Global Enterprises (TP: ¥330).
Praj Industries (TP: ¥550), CCL Products (India) (TP: ¥600), Polycab India (TP: ¥3,080) and Bajaj finance (TP: ¥8,600) are also part of the key stock recommendations.
“If the market sails smoothly over the next 6-9 months, we may see the next trigger in the market with capital flowing into emerging markets, boosting overall market multiples,” added Axis Securities.
The above opinions and suggestions are personal opinions of analysts or brokers, and have nothing to do with Mint.
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