As the New Year unfolds, optimism among market participants persists, buoyed by the robust returns witnessed in 2023. However, amidst the stock market's unprecedented heights and perceived rich valuations, investors are navigating with caution, recognizing the importance of holding stocks resilient to sharp declines in the face of a potential reversal in bullish trends. While many analysts advocate an increased exposure to large-cap stocks, they also emphasize the significance of not overlooking smaller shares. The Economic Times (ET) has meticulously curated a selection of 15 stocks—comprising five large-cap, five mid-cap, and five small-cap options—drawn from recommendations by five reputable brokerages, each believed to possess the potential to surpass market expectations in 2024.
ICICI SECURITIES
NMDCCurrent Price: Rs 209 | Target Price: Rs 250ICICI Securities designates NMDC as its top pick in the metal sector, citing the upward trajectory in per capita steel consumption domestically and the anticipated doubling of crude steel capacity to 300 MT by 2030.
GRINDWELL NORTONCurrent Price: Rs 2,325 | Target Price: Rs 2,700With a robust exposure to key sectors of the economy, particularly in abrasives and ceramics, Grindwell Norton is poised for a resurgence, projecting double-digit growth. Anticipated revenue and net profit stand at 14% and 16%, respectively, over FY23-FY26.
GREENPLY INDUSTRIESCurrent Price: Rs 238 | Target Price: Rs 295Benefiting from the impending completion of a significant portion of residential real estate developed in the past 2-3 years, Greenply Industries is positioned to thrive in the building materials segment, particularly in wood paneling. The company is expected to be a key beneficiary of this trend.
This selection of stocks reflects a strategic blend of market capitalizations and sectors, offering investors a diversified portfolio that aligns with the dynamic landscape anticipated in 2024.
KOTAK SECURITIES
INFOSYSCurrent Price: Rs 1,542 | Target Price: Rs 1,870Kotak Securities highlights Infosys as a promising investment, citing the company's significant wins in large deals during the first half of FY2024, providing clear visibility for growth in FY25. The brokerage anticipates a normalization of Infosys' growth to 9.1% in FY25E, up from 2% in FY24E.
SIGNATURE GLOBALCurrent Price: Rs 876 | Target Price: Rs 910With a commendable track record of swift turnarounds and superior capital efficiency, Signature Global stands out as an attractive option for equity investors seeking an alternative to DLF. The company positions itself as a strategic player in the thriving real estate market in Gurgaon.
SAMHI HOTELSCurrent Price: Rs 166 | Target Price: Rs 230Samhi Hotels, with an incremental pipeline of 617 keys, is poised for growth. Kotak Securities foresees a moderation in capital expenditure, improved cash flows, and the infusion of fresh equity contributing to Samhi's ability to generate higher free cash for further deleveraging.
MOTILAL OSWAL
STATE BANK OF INDIACurrent Price: Rs 641 | Target Price: Rs 800Motilal Oswal singles out State Bank of India (SBI) for its robust performance, propelled by solid loan growth and reduced provisions. SBI's disciplined approach is reflected in well-moderated gross NPA and net NPA ratios of 2.55% and 0.64%, respectively, in the second quarter of FY24. This positions SBI as an appealing investment choice.
DALMIA BHARAT
Current Price: Rs 2,279 | Target Price: Rs 2,800
Dalmia Bharat is positioned to benefit from an upswing in demand and robust price hikes in the Eastern region. The brokerage estimates a commendable 11% Compound Annual Growth Rate (CAGR) in volume over the period from FY23 to FY26, underscoring the company's growth potential.
CYIENT DLM
Current Price: Rs 674.80 | Target Price: Rs 870
Expectations for Cyient DLM include a robust 41% CAGR in revenue and an impressive 83% CAGR in adjusted profits over the FY23-26 period. The optimistic outlook is attributed to a strong order book, healthy order inflows, high customer retention, and the company's robust promoter heritage.
IIFL SECURITIES
ITC
Current Price: Rs 462 | Target Price: Rs 490
IIFL Securities underscores ITC's strategic focus on expanding its non-cigarette Fast-Moving Consumer Goods (FMCG) portfolio through premiumization and broader portfolio expansion. Despite challenges in the cigarette business, ITC aims to increase its share of tobacco consumption while consolidating market share. The brokerage anticipates robust and diversified growth to persist.
DEEPAK FERTILIZERS
Current Price: Rs 678 | Target Price: Rs 780
Maintaining its earnings per share (EPS) estimates for FY24-26, IIFL Securities notes that improvement in ammonia spreads has offset lower TAN spreads for Deepak Fertilizers.
UPDATER SERVICES
Current Price: Rs 337 | Target Price: Rs 418
Updater Services, identified as a leading integrated business services platform, is expected to capitalize on economic growth, increased outsourcing, and market share gains. IIFL Securities envisions an impressive 21% EPS Compound Annual Growth Rate (CAGR) over FY23-26, with reported EPS potentially experiencing a fourfold increase.
KOTAK MAHINDRA BANK
Current Price: Rs 1,905 | Target Price: Rs 2,180
Kotak Mahindra Bank remains committed to technological advancement, aiming to enhance customer experience and cost efficiencies. The bank anticipates maintaining its industry-leading asset quality while pursuing further growth.
EICHER MOTORS
Current Price: Rs 4,132 | Target Price: Rs 4,800
As the industry witnesses a gradual shift towards motorcycles in the 125+cc category, Eicher Motors is poised to benefit directly from this trend. Additionally, the company's Stark Future investment is geared towards accommodating the rising demand for Electric Vehicles (EVs) in the commercial vehicle segment.
MPHASIS
Current Price: Rs 2,733 | Target Price: Rs 3,350
Mphasis is expected to capitalize on healthy demand for Artificial Intelligence (AI), cloud, and transformation deals. The company's firm order pipeline, coupled with ongoing investments in technology, positions Mphasis favorably. The brokerage notes the potential for strong performance with a yet-to-be-converted order pipeline contributing to revenue growth.