Here are top stock picks to make your portfolio tick in the new year

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As the stock market hovers below record levels, investors might need to be choosy about their stock picks to keep portfolios ticking. After the Nifty and Sensex rose over 20% in 2021, market participants said concerns over heated valuations, hawkish central banks and the Omicron variant of Covid-19 could cap upsides. However, there are some stocks, which analysts said, will stand out notwithstanding these risks. ET takes a look at top stock picks for 2022.

VINAY KHATTAR
Head of Research, Edelweiss Wealth Management

Indo Count Industries
CMP: Rs 248.35
Target Price: Rs 425

It has an asset-light business model and while the company’s main market is the US, it is also beginning to focus on India, said Khattar. The company has also expanded its capacity which is a positive factor for the long term, he said.

Home First Finance
CMP: Rs 776.85
Target Price: Rs 1,150

The company is into the smallticket mortgage market, which is focused on smaller cities and towns. That market is growing at 25-30% every year and Home First can deliver good yields, net interest margins and return on assets going ahead, he said.

ICICI Bank
CMP: Rs 735.65
Target Price: Rs 900

Under CEO Sandeep Bakhshi, the bank appears to be going well and its non-performing assets are on a downward trajectory. Its net interest margins have expanded by 60 basis points in the last three to four years, RoA (return on assets) has jumped 75 basis points in the last three years and the talent pool is superior, said Khattar

AK PRABHAKAR
Head of Research, IDBI Capital

Sona BLW Precision Forgings
CMP: Rs 709.8
Target Price: Rs 950

The company has been growing at a 50% compounded annual growth rate and is likely to maintain the same going forward, said Prabhakar. “It is a stock worth holding for fi ve to ten years and did not correct in the recent correction due to its strong growth prospects.”

SBI Life Insurance
CMP: Rs 1,181.05
Target Price: Rs 1,500

Prabhakar said life insurers’ stocks did not do well because of the fi rst and second wave of Covid-19 but now they have increased premiums and have enough provisions for all Covidrelated claims. The number of insured people as a percentage of GDP has also increased sharply, which bodes well for the stock.

Kolte-Patil Developers
CMP: Rs 298.30
Target Price: Rs 375

Prabhakar said Kolte-Patil Developers is one of the most attractively valued in the real estate space. The company is growing its presence in Mumbai and Bengaluru, which is considered a long-term positive

SANDIP SABHARWAL
Founder, asksandipsabharwal.com

Larsen & Toubro
CMP: Rs 1,892.35
Target Price: Rs 2,500

Sabharwal said L&T has been getting strong order infl ows through the pandemic period and the company has cut down on leverage. Execution is likely to pick up which could lead to an improvement in margins. “There is a lot of upcycle in commodities and L&T could be a benefi ciary through overseas orders,” he said, adding that valuations are cheaper versus Nifty.

ICICI Bank
CMP: Rs 735.65
Target Price: Rs 950

The bank’s balance sheet has been cleaned up and it is very well placed because when its growth picks up, profi tability will be higher, according to Sabharwal. The bank has strong subsidiaries that add substantially to the overall value of the bank and valuations are still lower than other large-cap private banks, he said.

Praj Industries
CMP: Rs 330.70
Target Price: Rs 500

Praj has a very strong order book and with the government’s focus on ethanol, the company is likely to grow by 40-50% every year, said Sabharwal, adding that valuations are reasonable.

SIDDHARTHA KHEMKA
Head – Retail Research, Motilal Oswal Financial Services

Godrej Consumer Products
CMP: Rs 960.8
Target Price: Rs 1,180

Khemka said he is bullish on the stock for 2022 as the new CEO Sudhir Sitapati has laid a clear emphasis on driving double-digit underlying volume growth in the medium term through market share gains and disruptive innovation. His bullishness is also derived from the healthy domestic volume growth witnessed by Godrej Consumer in the last 18 months, while Africa and Latin America businesses are turning around — both of which were problem areas earlier

Zensar Technologies
CMP: Rs 524.25
Target Price: Rs 600

The revenue growth momentum of Zensar could continue in the second half of FY22 and into FY23. The new CEO-led leadership team is in place and its growth strategy has delivered results, said Khemka. “We expect sustained traction, despite margin falling to mid-teens. With a likely return to high-teens organic growth in FY23 on a good FY22 exit and a recovery in key accounts, we see the potential for a signifi cant stock re-rating as valuations catch up with its peer group,” he said.

Apollo Hospitals
CMP: Rs 4,977.50
Target Price: Rs 5,900

Apollo is building a strong omnichannel pharmacy business through the Apollo 24|7 online platform led by its network of 4,300 retail stores. The hospital chain could garner 14% market share in e-pharmacy over the next fi ve years, said Khemka, who expects revenue and profi t to see a compounded growth of 16% and 30% respectively over FY22-FY23.

RUCHIT JAIN
Lead Research Analyst, 5Paisa Capital

CCL Products (India)
CMP: Rs 433.70
Target Price: Rs 480

Jain believes CCL is on track to register smart growth in earnings in coming years and valuations are attractive at current levels.

ICICI Bank
CMP: Rs 735.65
Target Price: Rs 810

Jain is bullish on the stock for 2002 due to its strong distribution network. ICICI Bank has one of the best tech platforms and their digital sourcing has seen signifi cant growth in the last two years, said Jain.

Larsen & Toubro
CMP: Rs 1,892.35
Target Price: Rs 2,200

L&T expects acceleration in execution and project award activities and the management is confi dent in sustaining margins in FY22. The order book continues to remain strong while the valuations are attractive, said Jain.