Infosys, Bharti Airtel and ICICI Bank among top large-cap stocks to buy in 21st cycle as earnings return


The brokerage firm has selected 12 large-cap stocks to invest in 2021 because it sees a pickup in earnings and expects liquidity and rates to remain favorable.

BSE Sensex and Nifty 50 recorded 15% returns in calendar year 2020, despite challenges related to COVID-19. Indian equity markets rebounded intelligently from March lows and ended the year with new highs. The rollout of COVID-19 vaccination will start from January 16, 2021 in India, which could boost the pace of demand recovery. The national research and brokerage firm Motilal Oswal Financial Services expects the government to prioritize growth in the next Union budget 2021. The brokerage firm is betting on the sectors of BFSI, IT, health, cement and automotive. He has selected 12 large-cap stocks to invest in 2021 because he sees earnings picking up and expects liquidity and rates to remain favorable.

Also read: This is what HDFC, ICICI, SBI MF bought, sold in December; Mutual funds continue to record exits

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Infosys: Research Firm Expects Infosys Strong Business Pipeline and Resilient Portfolio to Help Generate Best Peer Group USD Revenue (8.6%) and CAGR PAT (17%) on fiscal years 20-22E, thanks to important victories, to a strong exposure to the digital activity. , improvement of cost parameters such as on-site-offshore ratio and attrition, and overshoot of the investment phase.

HUL: Hindustan Unilever Ltd (HUL) gained 90% market share and increased penetration in 70% of the portfolio from pre-COVID levels. Motilal Oswal sees strong potential for earnings growth beyond the short term due to its portfolio and execution strengths. “Significant synergies in FY22E following the GSKCH merger,” he says.

ICICI Bank: The private bank ICICI Bank remains one of the flagship ideas of brokerage in the BFSI space. He expects a RoA / RoE of 1.7% / 15.2% for FY23E. The bank is seeing a strong recovery in demand for consumer loans, as guaranteed loan disbursements surpass pre-COVID levels.

Bharti Airtel: Motilal Oswal favors Bharti Airtel given its good profit outlook and improved RoCE and FCF production potential. “We expect it to generate FCF post-interest of INR 64 billion in FY22E after factoring in the spectrum renewal cost of Rs 13,000 crore.

HCL Technologies: Given its deep capabilities in the IMS space and strategic partnerships, investments in cloud and digital capabilities, Motilal Oswal expects HCL Tech to emerge stronger through expected increase in demand. companies for these services.

SBI: The brokerage firm believes the cycle of earnings normalization has begun as uncertainty over COVID-19 has eased significantly. The brokerage firm believes that the State Bank of India has a strong franchise, both in assets and liabilities, and is gaining market share unlike other PSBs. “We estimate the PPoP FY20-23E at 11% CAGR (v / s FY15-20 CAGR of 7% CAGR), helped by improved cost of funds and market share gains,” he says.

Ultratech cement: Large cement company Ultratech Cement is increasing acquired underutilized capacity (Binani, Century), and also has a strong pipeline of projects and brownfield expansion potential, providing visibility into growth long-term. It estimates a 14% / 28% CAGR of consolidated EBITDA / PAT over fiscal years 20-22, thanks to robust volumes and lower operating and interest costs.

Titan Company: Motilal Oswal Financial Services rates Titan’s mid- to long-term earnings growth opportunity as best-in-class, reflected in the 24% CAGR of EPS over the past three years. The firm experienced a strong rebound in consumer confidence, supported by the wedding season and festive demand.

M&M: The research firm believes that Mahindra & Mahindra’s focus on tightening capital allocation could act as a catalyst for resettlement. He expects two levers for EPS growth and reclassification. Given its strong presence in tractors and light commercial vehicles, M&M is the best indicator of a rural recovery in the automotive segment.

Divi Laboratories: Divis Laboratories is a world leader in high volume APIs. The research firm expects a 34 percent CAGR on the FY20-23E, thanks to increased business prospects from CS and Generics as well as a 770bp margin expansion on better operating leverage.

Muthoot Finance: Motilal Oswal sees Muthoot Finance’s growth continue in the short to medium term given the high gold prices and higher demand for gold lending due to the foreclosure impact on clients. “We expect Muthoot Finance to generate 20% year-over-year growth in assets year-on-year in FY21 and 15% CAGR thereafter,” he said.

Ashok Leyland: Ashok Leyland is focused on expansion and creating new income and profits. The brokerage firm estimates that Ashok Leyland appears to be in a better position to emerge stronger and grow faster than the industry within 2 to 3 years.

(The stock recommendations in this article are made by the respective research and brokerage firm. The Bharat Express News Online assumes no responsibility for their investment advice. Please consult your investment advisor before investing.)

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