Stocks to buy in July: Sensex And nifty Recording the worst monthly performance since March 2020, each improved by over 8 per cent in June 2022. Still, the weakness cannot be over. While the broader market took a more cautious approach during the month, mid and small caps declined 7 per cent each in MoM. Overall, like May’22, June’22 also proved to be a volatile month due to weak global cues such as higher inflation print in US market, rise in US 10-year bond yields, and 75 bps. The US Fed has raised interest rates to curb inflation. Two important events, the RBI MPC and the US FOMC meeting were scheduled to take place in June’22 and have now come to an end, providing some clarity amidst the growing uncertainty.
Analysts at Axis Securities said: “In line with expectations, all central banks are now focusing on containing inflationary pressures by front-loading rising rates over the next six months. Keeping this in mind, there is a need to look at how the sustainable demand landscape unfolds in the near future. In any case, we expect inflation to touch higher levels in the next few months, but are confident that there will be some moderation in the coming quarters or two.
Axis Securities has picked the top business ideas for the month of July – ICICI Bank, Bajaj Auto, Tech Mahindra, Maruti Suzuki India, State Bank of India, Bharti Airtel, Cipla, Federal Bank, Varun Beverages, Ashok Leyland, Astral Limited (India) ) ), Bata India, APL Apollo Tubes, Healthcare Global Enterprises, Praj Industries, CCL Products (India).
Some of these stocks from the July basket are listed below:
ICICI Bank
ICICI Bank (ICICIBC) is one of the largest private sector banks India With business operations spanning other sectors including retail, corporate and insurance. The bank is outperforming its competitors and is ticking most of the boxes on growth, margins and asset quality. Strong provisioning buffer with higher credit growth, improving operating profit, and stronger deposits
The franchise will help the bank achieve ROAE/ROAA expansion in FY23-24E. On the valuation front, we believe the Bank remains in a comfortable position. We maintain BUY on the stock with a revised target price of Rs 1,000/share (SOTP basis Core Book at 2.8x FY24E and Support Price of Rs 173 per share).
Bajaj Auto
Bajaj auto (BAL) continues to be the second largest player (19 per cent market share) in the domestic motorcycle segment and the largest exporter of two wheelers (2W) in India. Bajaj Auto 2W looks to capitalize on demand normalization and premiumization trends in the industry which should further support profitability and operational performance. In addition, we expect the company to achieve further growth in exports driven by its market leadership position, brand equity and advanced distribution network. Bajaj Auto continues to be our preferred choice in the 2W segment, which has fair valuations and strong medium-term growth prospects. We maintain our BUY rating on the stock and value it at 17.5x FY24E EPS to arrive at the target price of Rs 4,350.
Tech Mahindra
Tech Mahindra is India’s leading IT services provider for several business groups. We believe that Tech Mahindra has a superior service mix and multiple long-term contracts that are well spread across all the verticals, thereby reducing its dependence on any one vertical. In addition, we expect healthy traction in the communications and enterprise verticals which will greatly accelerate the company’s revenue growth going forward. We recommend a BUY rating on the stock and assign a 20x P/E multiple of Rs 83.7/share to the company’s FY24E earnings, to arrive at a target price of Rs 1,700/share. TP means an increase of 70% over CMP.
maruti suzuki
Maruti Suzuki India Limited (MSIL) is the market leader in the domestic passenger car industry with a market share of around 45 per cent. The new launches targeted to fill gaps in its portfolio are likely to improve the overall product mix. The expected shift towards petrol and CNG vehicles will help the company gain more market share. Going forward, we expect new product launches to resume with a mix of product upgrades and new model launches. We expect the company to witness a strong CAGR growth of 16 per cent in volumes during FY22-24E. We have a BUY rating on the stock with a target price of Rs 9,800, valuing the stock at 27x its FY24E EPS.
state Bank of India
State Bank of India (SBIN) is the largest public sector bank in terms of assets, deposits, branches, number of customers and employees and also has a pan-India presence. SBI continues to be the best game among PSU banks
Gradual improvement in Indian economy due to its healthy PCR,
Stronger capitalization, a stronger liability franchise, and a better asset
quality approach. We believe that the credit cost has normalized and improved
Growth outlook should take over 14-15 per cent to double-digit RoE
FY23-24E. Against this backdrop, we maintain BUY rating on the stock
Revised Target Price of Rs.665/Share (1.3x . SOTP Base Core Book)
FY24E and subsidiaries at Rs 185
The views and investment suggestions of experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decision.
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