Top stocks to buy in 2021: 9 top stock picks of brokerages for 2021 - Stocks to buy in 2021

Stocks to buy in 2021

Information technology and Bharti Airtel are among the best large-cap stocks to buy in 2021, while banking and chemical companies are the most favoured bets in the mid-and small-cap space, according to leading Indian brokerages. After a tumultuous 2020, which saw benchmark indices plunging 40% in February-March and then skyrocketing 85% to record highs, brokerages are hoping for a less euphoric 2021 but a better year for the broader market compared to large caps which are trading at steep valuations. “Small and midcaps are picking up steam and they should deliver solid returns in 2021 as economic uncertainties will reduce and volatility will decline,” said Naveen Kulkarni, CIO, Axis Securities. “We would advise investors to build a long-term portfolio as the prospects for equity investment have improved. A lower interest rate environment and higher fi scal spending will continue to support the equity market.” ET takes a look at the top stock picks of brokerages for 2021.

1. BHARTI AIRTEL | Target Price: Rs 670

Bharti has delivered a consistently superior operating performance, said Axis Securities. The company continues to gain market share each quarter. Subscriber additions in the last two months have surpassed Reliance Jio. With more price hikes expected in 2021, Bharti Airtel is set to be the biggest beneficiary, said Axis.(Axis Securities)

2. NOCIL | Target Price: Rs 176

NOCIL is amongst the most diversified rubber chemicals companies in the world, with about 22 products. This offers its customers to partner with a dependable player, offering a one-stop-shop especially in troubled times, said Axis Securities. There has been a significant improvement in the overall business from the second half of FY21 with a sharp rebound in volumes to be reported in FY22 on the back of new capacity, economic growth bouncing back to normalcy, and a low base said Axis.

3. SPANDANA SPHOORTY | Target Price: Rs 875

Spandana is likely to deliver strong AUM growth, led by higher penetration, customer acquisition, productivity, and ticket sizes, said IIFL. Despite its strong earnings growth outlook, a liquidity-overhang may persist, given its dependence on banks and increasing instances of disruptions in MFIs, said IIFL

4. INFOSYS | Target Price: Rs 1,385

The brokerage remains optimistic about Infosys given its strong digital portfolio, healthy deal pipeline, account expansion, cost discipline, and upbeat management expectations. Also, the company is set to benefit from the rapid increase in demand for digitization across industries amid the pandemic, said Anand Rathi.

5. COROMANDEL INTERNATIONAL | Target Price: Rs 1,012

The crop protection business grew by 35% versus last year for the first half and 26% for the quarter, the company further strengthened its new product launches and strategic tie-ups with global players and co-marketing initiatives, said Anand Rathi. It continues to invest in R&D, product development and has a very rich product pipeline, and tends to introduce new molecules in the coming quarters, said Anand Rathi.

6. ULTRATECH CEMENT | Target Price: Rs 5,760

The brokerage estimates UltraTech’s consolidated EBITDA will grow at 14% and pro twill grow at 28% on a compounded basis over FY20-FY22, driven by robust volumes, operating cost reduction, and lower interest costs. Its planned capacity expansion of 19.5 million tonnes per annum by FY23 provides strong volume growth visibility for FY23, said Motilal Oswal.

7. AU SMALL FINANCE BANK | Target Price: Rs 1,100

The bank has shown strong progress in building a granular liability franchise resulting in a decline in its cost of funds, thereby aiding margins, said Motilal Oswal. Asset quality concerns are easing with a near-normal collection efficiency of 96% in September 2020, said Motilal Oswal. The bank carries a high provisioning buffer and healthy PCR of 71%, which should keep the credit cost under control, it said.

8. HCL TECHNOLOGIES | Target Price: Rs 1,105

Growing opportunities in cloud, automation, and cybersecurity put HCL Tech in a sweet spot, said ICICIdirect. Its expertise in IMS and app modernization can witness phenomenal growth led by integrated deals in the cloud, said ICICIdirect.

9. PNC INFRATECH | Target Price: Rs 220

ICICIdirect remains constructive on PNC given its robust order book, healthy return ratios, and lean balance sheet. Sufficient internal accruals from the current order book is enough for equity infusion for its HAM projects portfolio, said ICICIdirect

Top stocks to buy in 2021

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