Infosys, Hindalco, Coforge Among Anand Rathi's Top Diwali Stock Picks
The Indian equity benchmarks have given tremendous returns since last Diwali and beginning of Samvat 2077 i.e. Hindu New Year that began on November 14 last year. The Sensex has surged a whopping 50 per cent or 20,555 points in Samvat 2077 and the broader Nifty 50 index has climbed 43 per cent or 5,485 points (as of October 26 closing prices). The upmove came on the back of swift economic revival in aftermath of the devastating Covid-19 second wave, fast pace of vaccinations, government's production-linked incentive schemes for various sectors and low interest rates. Meanwhile, investors remain bullish on Indian markets as corporate earnings are expected to remain robust while domestic and foreign investors continue to pump money in the markets, analysts said.
Here are the top Diwali stock picks from brokerage firm Anand Rathi:
Infosys
Target Price: Rs 2,000
In Q2FY22, the company delivered a strong quarter performance with YoY revenue growth increasing to 19.4 per cent and sequential growth accelerating to 6.3 per cent in constant currency. Growth was broad-based across geographies and segments with the largest geography, North America growing at 23.1 per cent and the largest segment, Financial Services growing at 20.5 per cent, YoY in constant currency. Revenue from digital portfolio grew by 42.4 per cent YoY in constant currency terms. The company won 22 Large deals of over $50 million, with TCV of $2.15 billion in Q2. We remain optimistic on Infosys given its strong digital portfolio, healthy deal pipeline and higher growth guidance. We initiate a buy on Infosys with a target price of Rs 2,000 per share, Anand Rathi said in a report.
Hindalco
Target price: Rs 578
Hindalco Industries is the world's largest Aluminium rolling and recycling company and a major Copper player. The company is also recognised as one of Asia's largest producers of primary Aluminium. The company maintains a presence throughout the manufacturing value chain from bauxite mining, alumina refining, coal mining, aluminium smelting to downstream rolling, extrusions, and foils. We believe that Hindalco remains on its guided strategy with deleveraging underway and overall operations getting stronger by each passing period. The valuations are still not stretched considering the solid operational performance and ongoing balance sheet deleveraging together with strong opportunities for pursuing growth capex at a comfortable leverage position, Anand Rathi said.
Coforge
Target price: Rs 6,465
Coforge (earlier known as NIIT Technologies) is a highly differentiated IT services and solutions firm. Coforge enjoys a strong presence in select industry verticals and their sub-segments that include Insurance (Life,Non-Life, Commercial/Specialty), Travel and Hospitality (Airlines, Travel Tech, Airports, Surface Transport, Hospitality/Hotels/Logistics), Banking & Financial Services (Wealth/Asset Management, Risk/Compliances). In addition to these, the company has a growing presence in Retail, Healthcare and Hi-tech, Manufacturing, and Public Sector/Government (outside India). On back of robust deal pipeline along with strong deal wins momentum and particularly consistency in large deal wins, value creation from SLK Global acquisition and strong FY22 guidance from management, we recommend buy on the stock.
Indo Count Industries
Target price: Rs 334
Indo Count is India's one of the largest manufacturer and exporter of bed sheets, bed linen, quilts from India while being the top bed sheet supplier to the US. The company has comprehensive product portfolio in the premium segment that comprises of bed sheets, fashion bedding, utility bedding and institutional bedding. With physical presence in India, USA, UK and UAE in terms of showrooms, design studios and warehouse, the company export to more than 54 countries across 5 continents. ICIL is well prepared to seize every opportunity on the back of their healthy balance sheet, financial prudence, and focused approach.
Rossari Biotech
Target price: Rs 1,840
Rossari Biotech is a leading specialty chemicals manufacturer in India, Rossari provides customised solutions for specific industrial and production requirements for the FMCG, apparel, poultry and animal feed industries through a diversified product range comprising home- and personal-care, and performance chemicals, textile chemicals and animal health and nutrition products. We believe the company to continue to post growth with strong traction in all its segments and incremental growth with further increase in utilisation in its Dahej facility.
Vardhman Special Steels
Target price: Rs 360
Vardhman Specialty Steels (VSSL) is one of the leading producers of special steel in India. Part of the US$1.20 billion Vardhman Group, VSSL features among the leading producers of special and alloy steels catering primarily to the domestic automotive sector. The Company, for more than 40 years, caters to diverse requirements of hot rolled bars for Engineering, Automotive, Tractor, Bearing and Allied Industries.
