As the government began to ease the pandemic induced lockdown constraints, the Indian share market is expected to undergo huge volatility. The BSE Sensex slumped to a 52-week low of 25, 638, and later restored to a 34,000 level, from a record high of 42,273. In these chaotic times, the stock market has shown to be an opportunity for the investors to speculate on blue-chips companies which are available at surprisingly low prices. Geojit Financial Services, a research and brokerage firm has listed a few stocks that can stay secure and prosper during the ongoing uncertainties and also after the pandemic situation is done with.
The brokerage firm sees an upside of over 30% in these blue-chip stock prices. “The market believes that the economy would not be able to revive soon, leading to a huge change. Currently, it offers an opportunity to purchase blue-chips which are underestimated, overlooking their sheer brand value and leadership qualities,” said the research and brokerage firm.
ITC
It is recommended to purchase ITC stock with a 12-month target of Rs 260, which an upside of 31.50% from Monday’s close. ITC has negligible debt and a good cash position of nearly Rs 16,000 crore including short-term investments of Rs 12,500 crore as of FY19. It is deduced that the acquisition of Sunrise Foods and a partnership with Amway will boost revenue growth. “Attractive valuation, increase in cigarette price, and gradual expulsion of lockdown will help the stock,” said the brokerage firm.
State Bank of India
SBI shares were trading at 187.65 apiece on BSE on Tuesday’s session. It will take an upside of 28% for the SBI stock to reach the price target of Rs 240 forecasted by the brokerage firm. Core fundamentals, cut in deposit rates, stable asset quality post moratorium, and a better net interest margin (NIM) are among the few factors which are expected to stimulate profitability. The capital adequacy rate stands at 10.2% and further capital buffer can be easily managed by diluting stakes in subsidiaries.
HDFC
Geojit is optimistic on the stock with a ‘buy’ rating and target price of Rs 2,166 for 12 months, which leads to an upside of 23% from Monday’s close for HDFC. The mortgage market in India is at an infant stage and with an infusion of 10% of nominal GDP, tremendous growth potential over long term supported by fiscal incentives and interest subvention scheme is expected.
ICICI Bank
ICICI, an Indian multinational private sector bank has devised higher provision surpassing the RBI guidelines at Rs 5,700 crore to cover moratorium impact and stressed assets for the quarter. Geojit Financial Services has recommended purchasing the stock with a 16% upside from yesterday’s close. The stock was trading flat at Rs 361 apiece on BSE in late afternoon proceedings, on Wednesday.
