Indian share markets staged a smart recovery in the calendar year 2020 and ended the year at record highs, on the back of positive global news flow and continued foreign fund inflows.
On a year-to-date (YTD) basis, broader indices delivered 15% returns, after staging a smart recovery of 84% from the March lows. In terms of YTD, Nifty Pharma topped the rank among other sectors, growing 60%, followed by an almost 55% rise in the Nifty IT index. Nifty metal grew by 16%, while Nifty FMCG was up 15% since the start of the year 2020.
In today's session, Sensex closed shy of 47,800 while the Nifty50 ended a tad below the 14,000 mark.
The market may continue to remain volatile even after the monthly expiry on December 31, amid the start of vaccination and $900 billion US stimulus.
Here is a list of top trading ideas from brokerages for the next year:
Shares of the IT major is among HDFC Securities' top 10 stock picks for 2021 and recommended Buy rating at Rs 1,240.30 apiece.
Analysts at HDFC Securities think Infosys' financial profile is robust, led by a debt-free balance sheet and healthy cash-generating ability in the past. Financial flexibility is strong, supported by robust liquidity in the form of cash and cash equivalent of Rs 26,011 crore as of 30th Sep-20.
Listing the IT major as one of the top stock picks for 2021, the brokerage said," Infosys announced large deal wins with a total contract value of $ 3.15b, which is the highest ever recorded in Q2FY21 (includes mega-deal with Vanguard); 16 large deal wins were reported in Q2FY21. The IT deal pipeline has been continuously improving despite cost-cutting and cash conservation measures by clients. "
Axis Securities suggested Buy rating for the stock at a target price of Rs 1,404 and said," Infosys is witnessing business traction led by accelerated enterprise investments in digital. Management believes that the pandemic has accelerated the already strong trend for digital transformation. Infosys' large deal momentum has been robust and pipeline continues to be strong led by digital transformation and vendor consolidation."
2. Bandhan Bank
As per HDFC Securities, the lender, being India's largest MFI company with 20% plus market share in India and 50% plus market share in the East and North-east, has consistently demonstrated a strong track record in growing its balance sheet/earnings (AUM grew by CAGR 44% FY10-20).
"In the next five years, it aims to transform itself into a one-stop solution for all banking requirements of mid and low- income group customers," HDFC Securities added in its report.
Angel Broking also has given a buy rating to the stock, with a TP at Rs 525 and said," Strong deposit base & low cost of funds coupled with diversification away from West Bangal and MFI along with stable NIM's and RoE will lead to a retaing for the bank."
3. Bharti Airtel
ICICI Direct has given a 'Buy' call for Bharti Airtel and has chosen the counter in its quant picks for 2021. For a timeframe of 1 year, the price target for the telco is kept at Rs. 620.
Religare Broking also believes that Bharti Airtel has a high potential to outperform in Calendar 2021., due to its strong customer base, its consistent rise in 4G subscribers and industry-leading Arpu.
Ajit Mishra, VP of Research, Religare Broking said,"It has become increasingly clear that Arpus need to increase from here on for the telcos to continue investing in new technologies. Therefore, a rise in Arpu will help profitability for Bharti Airtel. Further, the valuations appear attractive at these levels,."
Axis Securities in its report suggests TP at Rs 676 and said Bharti Airtel Ltd. (Airtel) is India's largest telecom player having a strong presence not only in India but also in Africa. It also has a strong presence and highest penetration in India in DTH services, broadband services etc."
4. Sun Pharmaceutical Industries
HDFC Securities in its report said,"Sun Pharma is the largest Indian pharma company that commands ~8.2% market share in the Indian market. The company has 31 brands amongst the top- 300 brands in IPM. It is ranked No.1 in CNS, Cardiac, Orthopaedic, Dermatology, Nephrology and Urology in the domestic market. Sun Pharma has made Rs 12,600 cr worth of cumulative R&D investments over the past six years (FY15-20), which bodes well. It has earned $ 410mn in revenue from the global specialty business in FY20."
Ashis Biswas who is the Head of Technical Research at CapitalVia Global Research also gave a buy rating to the Sun Pharma stock, with a target of Rs 640 and at upside of 10%. "This counter appears to have registered a clean break out with a close above its multi-week consolidation zone on the weekly line chart. A strong bullish candle with decent volume is showing more upside moves in the coming sessions, " he said.
5. HDFC Life Insurance Company
ICICI Securities has a buy call on HDFC Life Insurance Company Ltd. with a target price of Rs 738.
Anand Rathi in its note also suggested a buy rating at TP of Rs 680 and said," The stock has provided a breakout from a falling channel on the daily chart and the conservative target for the same is coming around Rs 680 levels. The momentum indicator RSI has also reversed from its oversold territory which hints at further positive momentum in the counter. It is also trading well above its short-term and long-term moving averages. Based on the above rationale, we can expect a fresh momentum in the counter."
6. Gujarat Gas
Angel Broking in its note suggested a target price of Rs 450 for the stock and said," The company is witnessing strong demand growth from the Industrial sector due to fall in gas prices and also due to environmental concerns of using pet coke as a feedstock in the manufacturing sector."
ShareKhan in its report said," Robust volume growth outlook and decent margins would drive strong 20% PAT CAGR over FY2020-FY2023E, while aggregate FCF generation of Rs. 3,131 crore would make GGAS a net cash company. Consistent high volume growth outlook over the medium to long term makes valuation attractive at 16.8x its FY2023E EPS (which is at 37% discount to that of IGL despite superior volume growth outlook). Hence, we maintain our Buy rating on GGAS with a revised PT of Rs. 452."
Angel Broking sees 7% upside in the stock and suggests a buy rating at a target price of Rs 518, The brokerage said," Biocon did not stay behind as we witnessed a good price-volume breakout last Wednesday from the multiple resistance zone around Rs 480. Looking at the upward sloping RSI-Smoothened oscillator, we expect the stock to do extremely well after entering uncharted territory."
8. Amber Enterprises India
ICICI Direct Research sees a 19% rally in the stock in 2021 with a target price of Rs 2,830 apiece.
Amber Enterprises -the manufacturer of room air conditioners ( RAC), is a key supplier to top 10 AC brands," the brokerage firm said and added that it sees a structural growth story in India's RAC contract manufacturing industry along with major overseas brands choosing India as a manufacturing hub under their 'China+1 strategy'.
Axis Securities in its report suggested a buy rating at TP of Rs 2,800, with an 18% upside for the stock, and said, "The company caters to 9 out of top 10 AC brands in India which together have 75% plus market share in India. Amber also manufactures AC/NON AC components in its endeavor to be a total solutions provider for the RAC industry in India. Amber being a one-stop solutions provider is likely to benefit as more companies set up domestic manufacturing/ sourcing locally, as it is equipped to meet the components supplies as well as fully built units."