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Brokerages bullish on TCS, Escorts, Relaxo, HUL stocks for 2022

“Margin pressure due to surge in input costs is expected to reduce owing to price hikes, operational efficiency, and improvement in product mix.”

IANS | Mumbai |

For 2022, brokerage houses are bullish on a variety of stocks including TCS, Escorts, Relaxo, HUL 2022.

Accordingly, Motilal Oswal Financial Services has given a buy call for large-cap stocks such as TCS, ICICI Bank, Bharti Airtel, L&T, Godrej Consumer Products, Divi’s Labs, Titan, Tata Motors, and Reliance Industries.

In the mid-cap space, Angel One, Macrotech Developers, Ramco Cement, Zensar Tech, and Devyani International are some of the top picks from MOFSL.

Further, HDFC Securities has given a ‘buy’ recommendation for these ten stocks — Aditya Birla Capital, Gail India, Hindustan Zinc, Ipca Labs, Mahindra & Mahindra, Max Financial, Max Healthcare, State Bank of India, Tech Mahindra, and Zee Entertainment.

Aditya Birla Capital is the holding company of all the financial services businesses of the Aditya Birla Group and is expected to continue its credible makeover journey over the next three years.

According to Gaurav Garg, Head of Research at CapitalVia Global Research, Escorts, Relaxo, and Deepak Nitrite shares have better potential in 2022.

For Escorts, the target price is seen at Rs 2,400 per share, against Rs 1,904 on Friday’s close.

The agricultural machinery maker has an annual capacity of 120,000 units of tractors. Escorts has a presence in a variety of product segments, including tractors, agri-machinery, construction equipment, and railway equipment.

In the case of Relaxo, a footwear brand, the target is expected at Rs 1,800, against Rs 1,305 currently.

Relaxo has nine plants spread across three cities, with an annual production capacity of more than 20 crore pairs. Over the last ten years, the firm has had impressive revenue and profit growth of 13 percent and 27 percent, respectively.

The target for Deepak Nitrite is pegged at Rs 3,400, against Rs 2,491 at present.

Deepak Nitrite is a specialty chemicals producer, and is currently one of the fastest-growing in the world (second only to China), with an annual average growth of 13 percent over the previous five years totaling $25 billion. It has a large customer base serving over 900 clients in over 40 countries and has good competitive positioning in most of its product categories.

Further, Vinod Nair, Head of Research at Geojit Financial Services is bullish on HUL, HDFC Bank, Biocon, Tata Power, Tech Mahindra, and L&T.

“We are positive on HUL considering its pricing power, distribution expansion, and product innovation. Revival in urban demand given the opening of markets, and resilient rural demand aided by good monsoon & sowing, higher minimum support prices, and government’s initiatives to revive the economy including production-linked incentives schemes will support HUL,” Nair said.

“Margin pressure due to surge in input costs is expected to reduce owing to price hikes, operational efficiency, and improvement in product mix.”

For Biocon, Nair said that new product launches and higher operational efficiency should support long-term earnings growth prospectus.

“The company’s recent agreement with the Serum Institute of India to market Covid-19 vaccines further bolsters business prospects for Biocon. We expect a revenue CAGR of 20 percent over FY21-23E as the earnings outlook remains positive backed by Biocon’s focus on building a large portfolio of biosimilars and scaling up of biologics business in the emerging markets.”

Tata’s power is well placed to capture the opportunities across the green portfolio, he said.

On its part, Sunil Nyati, Managing Director of Swastika Investment, said he was bullish on Action Construction, Kajaria Ceramics, KPIT Technologies shares.

“I have a very bullish view of the capital goods and infrastructure sector for the next two to three years where my top pick is action construction equipment which is a perfect player for both capital goods and infrastructure themes. It is a debt-free company with strong growth prospects,” Nyati said.

“IT sector is the leader of this bull run and it may continue to do well as management of the companies are sounding very confident for the next five years. KPIT is one of the fastest-growing midcap IT companies which is going to be a key beneficiary of the EV theme because it is working aggressively towards software solutions for the EV industry.”