INSUBCONTINENT EXCLUSIVE:
Five heavyweights have contributed to about half the gains in the Nifty’s rally since September 20 — when the corporate tax rate cut was
announced — to record highs
The benchmark index has gained 11% since September 20, with Reliance Industries, Housing Development Finance Corporation, ICICI Bank, Axis
Bank and ITC contributing most of the gains
ET takes a look at the road ahead for these stocks:
Reliance IndustriesCMP: ₹1427.8 Change since Sep 20: 21.1%THE MUKESH Ambani-led
company has been on investors’ radar due to several factors
The oil-to-telecom conglomerate reported a 18% rise in September quarter profit to a record ₹11,262 crore
Analysts believe the company’s deleveraging plans of the tower, fiber assets and oil and chemicals business sale would help the company
“RIL is a must have in the portfolio and is likely to become a ₹10 lakh crore market cap company,” said Sanjiv Bhasin, executive
VP-markets and corporate affairs at IIFL
“If the Nifty rises to 13000, then RIL will be the frontrunner,” said Bhasin
The company recently became the first Indian company to touch the ₹9-lakh crore market cap milestone and was the first company to reach
the ₹8-lakh crore market cap milestone last year.
Axis BankCMP: ₹733.6 Change since Sep 20: 14.94%INVESTORS ARE positive on the stock
because of strong operating performance
“Overall operating parameters for the bank remain robust, with strong loan growth momentum, NIMs remain robust and asset quality metrics
have not deteriorated as a result
With the capital raising exercise completed, the overall tier I ratio stands strong at 15.03%,” said CIMB Securities in a note,
maintaining a ‘buy’ rating with a target price of ₹950
Chandan Taparia, derivative analyst at Motilal Oswal, said the stock can rise to ₹765 in a month with support at ₹695
Taparia added he would prefer ICICI Bank over Axis Bank.
HDFCCMP: ₹2234.9 Change since Sep 20: 13.2%STEADY EARNINGS performance and asset
quality have kept investors bullish on the stock
“HDFC’s 2Q (July-September) performance was steady with a 16% year-on-year net interest income growth, improving funding profile and a
marginal deterioration in builder book, which was on expected lines Given the current environment, the marginal deterioration in builder
book is on expected lines, said Nomura in a recent note, upgrading the stock to a ‘buy’ from ‘neutral’ and raising the target price
to ₹2550 from ₹2300.
ITCCMP: ₹259.3 Change since Sep 20: 9.5%ITC IS one of the biggest beneficiaries of the corporate tax cut,
Analysts said increased foreign flows into Indian market and the company’s high ranking on ESG parameters have also helped it gain in the
“We have not seen GST increase recently,” said Abneesh Roy, senior VPinstitutional equities at Edelweiss
“We expect ITC to post 10% CAGR going ahead, and we need to see what happens on the taxation front in the next six months
If we see below 10% increase or no increase then it is a positive,” said Roy.
ICICI BankCMP: ₹496.9 Chg since Sep 20: 28.5%ASSET QUALITY
problems of the bank are getting resolved and the provision coverage ratio is one of the best in the industry, said Pritesh Bumb, analyst at
“It will be good for ICICI Bank if some of the NCLT cases get resolved
Business of ICICI Bank is growing at a steady pace
It can give 12-15% annual return easily,” said Bumb, who has a ‘buy’ rating and a target price of ₹541 on the stock
The lender reported a 28% decline in its net profit for the September quarter
Excluding the impact of the one-time additional charge due to re-measurement of accumulated deferred tax, profit after tax would have been
₹3,575 crore in the second quarter
Analysts said the stock is likely to rise further as MSCI has increased its weightage in its India index
Chandan Taparia of Motilal Oswal expects the stock to rise to ₹525 in the near term.
