ITC, SBI, Maruti Suzuki among top 5 picks of Axis Securities with up to 23% upside potential
Axis Securities has revised the Dec’23 Nifty target at 20,200 by valuing it at 20x on Dec’24 earnings, implying an upside of 9-10 per cent from the current levels
- Jun 5, 2023,
- Updated Jun 5, 2023 2:41 PM IST
Domestic equity benchmarks posted marginal gains last week as strong domestic macroeconomic data supported sentiments. The BSE Sensex gained 45 points, or 0.1 per cent to settle at 62,547 during the week ended June 02, while the Nifty jumped 35 points, or 0.2 per cent, to 18,534.
According to Axis Securities, the Indian economy stands at a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy. It continues to believe in the long-term growth story of the Indian equity market, supported by the emerging favourable structure as increasing Capex enables banks to improve credit growth.
The brokerage firm has revised the Dec’23 Nifty target at 20,200 by valuing it at 20x on Dec’24 earnings, implying an upside of 9-10 per cent from the current levels. It believes that the current setup is a ‘Buy on Dips’ market and has come up with 5 large-cap stock ideas with up to 20 per cent upside potential. Do you own any?
ICICI Bank | Buy | Target Price: Rs 1,150 | Current Price: Rs 937.05 | Upside: 23%
Axis Securities believes that the bank has been outperforming its peers and has been firing on all cylinders. ICICIB has ticked most boxes on growth, margins, and asset quality.
The brokerage continues to like ICICI Bank for its strong retail-focused liability franchise, buoyant growth prospects, stable asset quality, healthy provision cover, adequate capitalization, and potential to deliver robust return ratios.
Maruti Suzuki| Buy | Target Price: Rs 10,500 | Current Price: Rs 9488.80 | Upside: 11%
According to Axis Securities, the company expects to outpace the industry growth rate led by good order books and new launches (Jimy and Fronx). "Strong order book, a higher share of premium SUVs, CNG vehicles in the sales mix will improve average selling price in FY24/25; further, improved chip supplies and stable commodity prices will drive the EBITDA growth(higher than earlier estimates) in FY24/25," it said.
State Bank of India | Buy | Target Price: Rs 715 | Current Price: Rs 587.20 | Upside: 22%
"Among PSU banks, SBI remains the best play on the gradual recovery of the Indian economy on account of its healthy PCR, robust capitalization, strong liability franchise, and improved asset quality outlook," said Axis Securities. It believes that normalization in the credit costs and the ability to deliver healthy growth should enable the bank to deliver RoA/RoE of 1%/15-17% over FY24-25E.
Varun Beverages | Buy | Target Price: Rs 1,860 | Current Price: Rs 1703.80 | Upside: 9%
Axis Securities believes that the company is well-placed under the current market situation as a strong summer season is expected to drive overall beverage sales across regions. Furthermore, the initial report on possible El-Nino (deficit rainfall) could delay the rural recovery which would lead the entire FMCG pack (ex-ITC) under wait-and-watch mode.
"Hence, in this current volatile market situation, we believe Varun Beverages provides better earning visibility than other FMCG peers in the near term," it added.
ITC | Buy | Target Price: Rs 490 | Current Price: Rs 443.20 | Upside: 11%
The brokerage believes that the narrative around the ITC is getting stronger as all its businesses are on the right track – stable cigarette volume growth led by market share gains and new product launches; FMCG business reaching the inflexion point, effective implementation of localisation strategy, driving premiumisation, leveraging technology on demand and supply side; moderation of raw material input cost; strong and stable growth in hotels as travel, wedding, and corporate activities pick up; steady and decent performance in paperboard and agribusiness witnessed in the last few quarters.
Disclaimer: The stocks mentioned in the story are for information purposes only. Investors or market participants should consult their financial advisors before taking any position
Domestic equity benchmarks posted marginal gains last week as strong domestic macroeconomic data supported sentiments. The BSE Sensex gained 45 points, or 0.1 per cent to settle at 62,547 during the week ended June 02, while the Nifty jumped 35 points, or 0.2 per cent, to 18,534.
According to Axis Securities, the Indian economy stands at a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy. It continues to believe in the long-term growth story of the Indian equity market, supported by the emerging favourable structure as increasing Capex enables banks to improve credit growth.
The brokerage firm has revised the Dec’23 Nifty target at 20,200 by valuing it at 20x on Dec’24 earnings, implying an upside of 9-10 per cent from the current levels. It believes that the current setup is a ‘Buy on Dips’ market and has come up with 5 large-cap stock ideas with up to 20 per cent upside potential. Do you own any?
ICICI Bank | Buy | Target Price: Rs 1,150 | Current Price: Rs 937.05 | Upside: 23%
Axis Securities believes that the bank has been outperforming its peers and has been firing on all cylinders. ICICIB has ticked most boxes on growth, margins, and asset quality.
The brokerage continues to like ICICI Bank for its strong retail-focused liability franchise, buoyant growth prospects, stable asset quality, healthy provision cover, adequate capitalization, and potential to deliver robust return ratios.
Maruti Suzuki| Buy | Target Price: Rs 10,500 | Current Price: Rs 9488.80 | Upside: 11%
According to Axis Securities, the company expects to outpace the industry growth rate led by good order books and new launches (Jimy and Fronx). "Strong order book, a higher share of premium SUVs, CNG vehicles in the sales mix will improve average selling price in FY24/25; further, improved chip supplies and stable commodity prices will drive the EBITDA growth(higher than earlier estimates) in FY24/25," it said.
State Bank of India | Buy | Target Price: Rs 715 | Current Price: Rs 587.20 | Upside: 22%
"Among PSU banks, SBI remains the best play on the gradual recovery of the Indian economy on account of its healthy PCR, robust capitalization, strong liability franchise, and improved asset quality outlook," said Axis Securities. It believes that normalization in the credit costs and the ability to deliver healthy growth should enable the bank to deliver RoA/RoE of 1%/15-17% over FY24-25E.
Varun Beverages | Buy | Target Price: Rs 1,860 | Current Price: Rs 1703.80 | Upside: 9%
Axis Securities believes that the company is well-placed under the current market situation as a strong summer season is expected to drive overall beverage sales across regions. Furthermore, the initial report on possible El-Nino (deficit rainfall) could delay the rural recovery which would lead the entire FMCG pack (ex-ITC) under wait-and-watch mode.
"Hence, in this current volatile market situation, we believe Varun Beverages provides better earning visibility than other FMCG peers in the near term," it added.
ITC | Buy | Target Price: Rs 490 | Current Price: Rs 443.20 | Upside: 11%
The brokerage believes that the narrative around the ITC is getting stronger as all its businesses are on the right track – stable cigarette volume growth led by market share gains and new product launches; FMCG business reaching the inflexion point, effective implementation of localisation strategy, driving premiumisation, leveraging technology on demand and supply side; moderation of raw material input cost; strong and stable growth in hotels as travel, wedding, and corporate activities pick up; steady and decent performance in paperboard and agribusiness witnessed in the last few quarters.
Disclaimer: The stocks mentioned in the story are for information purposes only. Investors or market participants should consult their financial advisors before taking any position