Describing Sensex as the ultimate compounding machine, Agrawal said it is reasonable to expect 15% corporate profit growth going forward. “If current P/E levels of 25x are maintained, this too translates to the Sensex compounding of 15% i.e. double every five years. In other words, the Sensex level of 1,50,000 around the year 2029,” Agrawal had written in an ET column recently.
The current bull run is led by heavy support from retail investors as well as institutional investors. Both FIIs and DIIs have collectively poured in a total of $50 billion on Dalal Street.
Here are top 10 stock ideas for the long-term from various brokerages:
1) Vedanta
CLSA has upgraded Vedanta from Underperform to buy and lifted the target price from Rs 260 to Rs 390 saying that it is well-placed to benefit from the commodity upcycle given its diversified exposure. The stock also comes with a 7-9% dividend yield.
2) Nuvama Wealth
Jefferies has initiated coverage on Nuvama Wealth with a target price of Rs 6,000. “Nuvama’s valuation discount is driven by a lower mix of Wealth / ARR, and we expect the steady improvement in business mix to drive re-rating for the stock over the medium-term, however, near-term upside can be limited after the recent run-up,” Nuvama said.Also read | Sensex at 1,50,000 by 2029: The ultimate compounding machine
3) Reliance Industries (RIL)
Nifty heavyweight RIL has potential to get re-rated across verticals – new energy, refining, chemicals and telecom, according to Morgan Stanley as its net debt declines, telecom tariff hikes are seen coming closer and new energy revenues start.
4) Hindustan Aeronautics (HAL)
Jefferies has initiated coverage on HAL with a target price of Rs 3,900 saying that GE tie-up shows potential of moving up in the OEM status among global defence companies.
5) ICICI Bank
ICICI Bank has been consistently outperforming its peers and has been firing on all cylinders. On account of strong retail-focused liability franchise, buoyant growth prospects, stable asset quality along with healthy provision cover and adequate capitalization, the private sector lender is the most preferred pick amongst banks for Axis Securities. Target price: Rs 1,250.
6) Zomato
Jefferies has a target price of Rs 400 on the stock. “With growing scale and improve unit economics across both businesses, Zomato’s profit pool will become increasingly visible over the next 5 years. We estimate net earning to rise from Rs 3 billion in FY24 to Rs 62 billion by FY30. As the franchise generates strong cash flows, capital allocation will be a key factor to watch-out for,” it said.
7) Aditya Birla Capital
Macquarie has initiated coverage on Aditya Birla Capital with an outperform rating and Rs 230 target price given the potential for robust loan/VNB growth and ROA/VNB margin expansion driven by access to cheaper funding, leveraging group ecosystem, strong SME growth, and improvement in protection mix.
8) Macrotech
Jefferies sees Macrotech Developers shares more than doubling to Rs 3,000 in the next 5 years amid a housing upcycle. “Given the good industry affordability levels and ongoing consolidation among developers, we believe that Lodha’s residential pre-sales are likely to stay on a 15-20% annual growth trajectory near term,” the brokerage said.
9) Bharti Airtel
Axis Securities sees the stock growing up to Rs 1,400 due to the company’s superior margins, impressive subscriber growth, and increased 4G conversions.
10) Amber
Amber is one the top picks of Jefferies in the small and midcap category with a five-year target price of Rs 9,740. “Our conviction is underpinned by secular growth prospects (India AC penetration at 7% vs global avg 30%), Amber’s leadership position in AC outsourcing (~29% value market share now vs. 22% in FY19), diversification into margin-accretive faster-growing components business and a diversified customer base,” it said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)