10 Sensex stocks need 16-37% rally to hit all-time highs; do you own any?

Even as the BSE benchmark Sensex is trading near its record high levels, at least 10 of the 30 index constituents including IndusInd Bank Ltd, Tech Mahindra Ltd (TechM), Infosys Ltd, Kotak Mahindra bank and ITC Ltd needed 16-37 per cent rally from Monday's levels to retest their all-time high levels, data compiled from corporate database AceEquity suggests.

IndusInd Bank at Monday's closing required 37 per cent jump to revisit its record high of 2,037.90 hit on August 3, 2018. The private lender hit a high of Rs 1,694.35 in January this year. Bernstein recently initiated coverage on IndusInd Bank with 'Outperform' and a target price of Rs 1,800. It sees the private lender as a quasi-NBFC given its NBFC-like loan book composition and a weak deposit franchise. The bank is well positioned for a potential rate easing cycle and has high exposure to attractive segments, it said.

Tech Mahindra required a 31 per cent jump over Monday's closing of Rs 1,400.80 to hit its December 2021 high of Rs 1,837.75. The consensus recommendation on the TechM stock, based on 42 analyst ratings, is hold. But a few brokerages have turned positive on the stock.

"We have upgraded the company to Buy with a revised price target of Rs. 1,715 (raised target multiple to 25xFY26E)  to factor probable business recovery on account of a well-defined and articulated roadmap towards FY27, which  is likely to be supported by gradually receding headwinds and leveraging of Mahindra group’s synergies and ecosystems," Sharekhan said in a note.

Infosys, another IT stock, also needed 28 per cent rally to revisit its January 2022 high of Rs 1,953.70. Nirmal Bang in its Q1 preview note said It would look for any change in guidance for FY25, the timing and extent of salary hikes in FY25, the extent of boost from the margin improvement program in FY25 and Any more one-offs or projects renegotiations like the one that Infosys experienced in 4QFY24.

Kotak Mahindra Bank Ltd, Asian Paints Ltd and Bajaj Finserv Ltd are three stocks that require 22-27 per cent rise to test record levels again. These three stocks hit their all-time highs in 2021-2022.  Nomura India has added Kotak Mahindra Bank Ltd among its top banking picks, as it excluded Axis Bank Ltd from the list.

On Asian Paints, Elara Securities earlier this month said: "The rising share of Birla Opus at its dealer outlets would have a Domino effect on other paints dealers. Asian Paints has increased in-bill discount in a few markets to address competition from new entrants. We expect it to be rolled out in other markets as Birla Opus gains momentum. Asian Paints could double incentives for painters & contractors and extend warranty on products. We believe while revenue risk for Asian Paints is low in the near term, there is a possibility of margin risk; hence, we retain our negative stance on the sector," it said.

ITC Ltd,  HCL Technologies Ltd. Hindustan Unilever Ltd and Bajaj Finance Ltd are a few other stocks needing 15-18 per cent rally to revisit record high levels again.

For HUL, Q1FY25 is likely to be muted with negative pricing of 2 per cent and a harsh summer impacting volumes of hot beverages (tea, coffee, HFD). "We expect pricing growth to come back in H2FY25. Also in H2FY25, we expect rural volume growth to likely recover on the back of potentially good rainfall. Retain ‘BUY’ with a target price of Rs 2,885.

In the case of ITC, Centrum Broking said strong operating leverage and improved product-mix should help ITC's FMCG segment to deliver 100 bps improvement in Ebitda margins. It has a target of Rs 536 on ITC.

Bajaj Finance has a consensus rating of Buy, based on 31 analyst ratings, as per Trendlyne.