Even as the government started gradually easing the coronavirus-induced lockdown restrictions, the Indian share market has been witnessing huge volatility. From an all-time high of 42,273, BSE Sensex plunged to a 52-week low of 25, 638 only to march northward to reclaim its crucial level of 34,000. These tumultuous times in the stock market have proved to be an opportunity for the investors to bet on blue-chips companies which are available at throw-out prices. Research and brokerage firm Geojit Financial Services has listed five such stocks which have the ability to stay safe and flourish during and after the challenging situation.
The brokerage firm sees an upside of over 30 per cent in these blue-chip stock prices.”The market had assumed that the economy would not be able to reopen soon, leading to a huge correction. Currently, it offers an opportunity to buy blue-chips which are undervalued, overlooking their sheer cash-rich, brand value and leadership qualities,” said research and brokerage firm.
ITC: Brokerage firm has recommended to ‘buy’ ITC stock with a 12-month target of Rs 260, which an upside of 31.50 per cent from Monday’s close. ITC has negligible debt and good cash position of nearly Rs 16,000 crore including short-term investments of Rs 12,500 crore as of FY19. Geojit Financial Services believes that the acquisition of Sunrise Foods and tie-up with Amway will support revenue growth. “Attractive valuation, hike in cigarette price and gradual removal of lockdown will help the stock,” the brokerage firm said.
State Bank of India: SBI shares were trading at 187.65 apiece on BSE in today’s session. It will take an upside of 28 per cent for the SBI stock to reach the price target of Rs 240 predicted by the brokerage firm. Core fundamentals, cut in deposit rates, stable asset quality post moratorium and better NIM are among few factors which are expected to drive profitability going ahead. “Capital adequacy rate stands at 10.2% and further capital buffer can be easily managed by diluting stakes in subsidiaries,” said Geojit Financial Services.
Bajaj Finance: On the back of a liquidity surplus of Rs 15,725 crore to meet its obligations and grow its AUM, Bajaj Finance stock will have to jump over 17 per cent from Monday’s close to hit the 12 months target price of Rs 2,940. “Capital adequacy ratio declined to 25% vs 26.8% in Q3 FY20 but still remains very high compared to the regulatory requirement of 15% and can raise funds easily, going forward,” the brokerage firm said.
HDFC: Brokerage firm is upbeat on the stock with a ‘buy’ rating and target price of Rs 2,166 for 12 months, which translates to an upside of 23 per cent from Monday’s close. The mortgage market in India is still at its infant stage with penetration of 10% in nominal GDP, implying huge growth potential over long term aided by fiscal incentives and Interest subvention scheme, the brokerage firm said in its report.
ICICI Bank: India’s second-largest private sector bank has created higher provision beyond the Central bank guidelines at Rs 5,700 crore to cover moratorium impact and stressed assets for the quarter. Geojit Financial Services has recommended to ‘buy’ the stock with a 16 per cent upside from yesterday’s close. The stock was trading flat at Rs 361 apiece on BSE in late afternoon deals.