Among so many big prospects, Axis Securities has identified eight large-cap stocks that may offer handsome returns.
Top Large-Cap Stocks include banking, finance, telecom, and IT sectors; these stocks will rise from the current levels by 31%. HDFC Bank, ICICI Bank, Bharti Airtel, Cholamandalam Investment & Finance, and HCL Technologies are some of the promising stocks on this list. All these stocks come with strong growth prospects and are also under favourable market conditions. Here’s the outlook for each of these stocks, as outlined by Axis Securities.
1. ICICI Bank (CMP Rs 1,296)
Target Price: Rs 1,500
Potential Upside: 16%
This is still a very investible idea with the upside of 16%. Axis Securities ascribes this to several business growth factors, a steady C-D ratio, a focus on improving fee income, and very impressive asset quality numbers. The bank will sustain good returns on assets as well as equity numbers of 2.2-2.3 per cent and 17-18 per cent, respectively. With fair capitalization and controlled expenditure, the bank is now set to see sustained growth in the coming years.
2. State Bank of India (SBI) (CMP: Rs 849)
Target Price: Rs 1,030
Upside: 21%
For the gambler wishing to seize the growth opportunity available in India, SBI is offering an upside of 21% that would attract investors. State Bank of India is the major public sector bank boasting its sound C-D ratio along with a high PCR of 72.62. Asset quality is another issue that is showing improvement now, as well. Axis Securities has a ‘Buy’ recommendation on SBI due to its robust capital structure and sound growth trajectory. With such fundamentals, the stock remains the best pick for investors searching for the public sector banking space.
3. Varun Beverages (CMP: Rs 586)
Target Price: Rs 700
Upside Potential: 19%
Varun Beverages is likely to sustain the growth momentum with a 19% upside potential. Axis Securities mentions the strategic acquisitions that the company has made lately to strengthen its footprint, especially in South Africa and DRC. The new manufacturing facilities commissioned and the strengthening of the distribution network in the rural areas are likely to increase efficiency and reduce costs. With these growth initiatives, Varun Beverages is well-positioned to capture further market share and deliver value to its stakeholders.
4. HDFC Bank (CMP: Rs 1,758)
Price Target: Rs 2,025
Upside Potential: 15%
Though there has been market rotation, HDFC Bank would prove resilient and has the potential to give out a 15% upside from here. On the count of its reduction of Loan to Deposit to premerger level HDFC, has been seen to further sharpen the deposit growth acceleration too. RoA/RoE would thus be taken to remain healthy at constant levels of 1.8-1.9% and 14-16% during FY25-27. HDFC Bank with improving cost ratios along with stable credit costs represents a good investment opportunity from the long-term perspective of investing in the banking space.
5. Bharti Airtel (CMP: Rs 1,579)
Target Price: Rs 1,880
Upside Potential: 19%
Bharti Airtel has had an upward trend due to growth in subscribers and an upswing in 4G penetration. Axis Securities has kept a ‘Buy’ call on the stock, and the reason for that call is Airtel’s comfortable margins and steady market expansion. The growth drivers the telecom giant enjoys come through the strategic focus on rural expansion where data demand is slowly rising. Bharti Airtel will be the biggest beneficiary of the change in India as 5G adoption starts gaining ground.
6. TVS Motor Company (CMP: Rs 2,460)
Target Price: Rs 2,890
Upside Potential: 17%
The two-wheeler’s household name brand, TVS Motor has also a possibility of going upwards further, and the estimated upside in the same comes at around 17% Axis Securities feels that the top line, EBITDA, and PAT for the company would express a CAGR of nearly 15%, 18%, and 25% in the period of FY24-26. This is backed by the company’s engineering prowess, a robust retail network, and increased premium offerings in international markets. With an expected return on equity of 23-26%, TVS remains a strong pick in the automobile sector.
7. Cholamandalam Investment & Finance Company (CMP: Rs 1,274)
Target Price: Rs 1,675
Upside Potential: 31%
Cholamandalam Investment & Finance is one of Axis Securities’ top picks, with an upside potential of 31%. The company looks to target a medium-term RoTA of 3.5% with the same RoA/RoE of 2.3-2.5% and 20-23% for FY25-FY27, respectively. The loan book is highly diversified for the company which includes vehicle finance and personal loans, and it has strong growth prospects. It can also be a good pick for an investor looking to make some finance stocks part of his portfolio.
8. HCL Technologies (CMP: Rs 1,773)
Target Price: Rs 2,045
Upside: 15%
HCL Technologies closes the list with a 15% upside. Healthy long-term contracts with leading global players make HCL Tech look sweet and continue to gain even in the volatile market. The overall strong revenue visibility of the company coupled with strategic investment in cloud and digital transformation services looks rather positive on long-term prospects. However, there could be the issue of economic pressure on major markets and supply-side constriction. Nevertheless, in terms of stability and the pattern of growth, it should be a good investment by the IT sector investor in HCL Tech.
Market Outlook: Hope on Big Cap Stocks
The top picks by Axis Securities have been able to exhibit the diversified nature and resilience of the large-cap market in India. There is an opportunity for steady gains for investors with stocks in the banking, finance, telecom, and IT sectors. They have exhibited good fundamentals, strategic growth initiatives, and the ability to respond well to economic uncertainty.
Despite the recent volatility, these large-cap stocks are excellent growth performers and thus are likely to deliver good returns. They are likely to be an attractive option for investors who want to make diversified portfolios and capitalize on India’s economic growth trend.
Investment Strategy: Why Large-Cap Stocks?
Large-cap stocks such as those discovered by Axis Securities are stable and less risky than the smaller ones. They form part of well-established companies with a good track record and solid financials. In this context, they appeal to the long-term investment horizon, and the companies listed below have been industry leaders, with a definite growth plan in place. This means they will better be positioned to produce returns in uncertain economic environments.
The financial parameters mentioned by Axis Securities have shown healthy operating efficiency with steady growth projections, thereby making these stocks suitable for investors with diverse risk appetites.
Conclusion
The eight large-cap stocks highlighted by Axis Securities, then, form an apt mirror of the Indian economy that has underlying strength as well as its constantly evolving market dynamics. Stocks are here boasting a high growth potential to the extent of 31%. Among such promising areas for investments lies SBI and HDFC Bank under the bank domain as well as HCL Technologies and all the way across.
All of these companies provide strength, growth potential, and financial soundness to a portfolio, thus important investments. They can be an integral part of an investment strategy with big-cap stocks especially when returns need to be aligned with the fluctuations in the market. Since the economy of India is growing, it may bring out the right return with such stocks.
Investors will be able to reap the combined strengths of these industry leaders in top-performing large-cap stocks by investing in these, aligning with a market that does not appear to be slowing down.
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