Stocks to buy in 2022: SMC Research picks 11 stocks that can outperform broader markets in New Year
The benchmark indices have given over 20 per cent return in one year so far. The buying interest was broadly seen from all sectors. Domestic markets performance has witnessed a steady uptick on the back of persistent buying by the foreign and domestic institutions, liquidity and improving macros. However, the Omicron variant in late November has spooked the markets across the world.
So far as on December 29, the Nify50 surged over 23 per cent and the BSE Sensex more than 21 per cent in one year. Though it would be unwise to even think of similar returns going forward in 2022, but SMC Research believes the best way to ride the tide is to play major themes by buying the respective leaders. Below are 11 stocks identified by SMC research that can outperform the broader markets in 2022.
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Reliance Industries Limited (RIL) | Sector: Oil & Gas | CMP: Rs 2365.95 |Target: Rs. 3025
The company has achieved outstanding operational and financial performance as compared to previous quarter with recovery in petrochemicals and retail segment, and sustained growth in Digital Services business. Retail business activity has normalised and the company continues to pursue growth initiatives in each of businesses with a focus on the India opportunity, thus we expect the stock to see a price target of Rs 3025 in 8 to 10 months.
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Infosys | Sector: IT-Software |CMP: Rs 1824.45 | Target: Rs 2263
The company continues to gain market share on the back of strong digital and cloud capabilities. With a strong start to the financial year, good deal momentum in Q2, a robust pipeline, the company is increasing its annual revenue growth guidance from 14% - 16% previously to 16.5% to 17.5% growth in constant currency. It is expected that the stock will see a price target of Rs.2263 in 8 to 10 months.
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ICICI Bank| Sector: Bank |CMP: Rs 732.90 |Target: Rs 835
The bank is focusing on growing the core operating profit in a risk calibrated manner instead of loan growth. The bank aims to improve share of profitable market opportunities by making delivery to the customer more seamless and frictionless through digitization and process improvements. It is expected that the stock will see a price target of Rs.835 in 8 to 10 months.
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State Bank of India (SBI) | Sector: Bank | CMP: Rs 455.80 |Target: Rs 523
The bank has exhibited healthy performance on various parameters with some parameters showing way better than industry performance and some showing in line with the industry performance. The strong underwriting practices have led to significant improvement in the asset quality of the bank. The bank aims to deliver 15% RoE on sustainable basis across economic cycles and expects to achieve target sooner. Thus, it is expected that the stock will see a price target of Rs.523 in 8 to 10 months’ time frame.
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HCL Technologies |Sector: IT-Software |CMP: Rs 1222.35 |Target: Rs 1418
Overall performance reported by the Company is quite healthy, a well-balanced capital allocation strategy through a combination of capital expenditure, dividends and acquisitions. Margin improved a tad and the deal win momentum was healthy. It is expected that the stock will see a price target of Rs.1418 in 8 to 10 months’ time frame.
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Larsen & Toubro |Sector: Infrastructure |CMP: Rs 1865.95 |Target: Rs 2181
The company will maintain leadership in the E&C segment in India, and is positioned to benefit from the large infrastructure spending in India, over the medium term. Moreover, the company`s focus continues to be on efficient execution of its large order book, working capital reduction, cost optimization through use of digital technologies aimed at operational efficiencies and driving an agile Balance Sheet. It is expected that the stock will see a price target of Rs.2181 in 8 to 10 months.
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Sun Pharma | Sector: Pharmaceuticals |CMP: Rs 797.10 |Target: Rs 945
Most of the businesses have recorded growth in financial performance despite the challenges related to the global COVID-19 pandemic. Its India business outperformed the average industry growth. The management also enthused by the growth in global specialty business. It is believed that all the business segments are well positioned and endeavour will be to grow the overall business. It is expected that the stock will see a price target of Rs.945 in 8 to 10 months.
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DLF | Sector: Realty | CMP: Rs 377.30 |Target: Rs 479
The strong business growth and aggressive hiring plans by IT/ITeS will continue to aid in the recovery and growth of this segment. The retail business continues to exhibit fast recovery. All its malls are now operational, though, with certain restrictions. It is witnessing a steady increase in the footfalls and expects growth in consumption across all the segments. Thus, it is expected that the stock will see a price target of Rs.479 in 8 to 10 months.
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Siemens |Sector: Capital Goods- Electrical Equipment |CMP: Rs 2368.05 |Target: Rs 2810
The company's strong market position is supported by access to the latest technology and brand equity of its parent, diverse product portfolio, wide geographical reach and established track record of timely execution of projects. According to the management of the company, as Government investment in infrastructure continues and capacity utilization levels increase, the company believe tendering for private sector capex will pick up in the months ahead. Thus, it is expected that the stock will see a price target of Rs.2810 in 8 to 10 months.
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Gland Pharma |Sector: Pharmaceuticals |CMP: Rs 3748.05 |Target: Rs 4597
According to the management of the company, it continues to focus on revenue diversification across geographies, which is helping it further to improve its manufacturing efficiencies because of benefits from scale as well as de-risking the business. Its wide therapeutic portfolio helped the company to sustain growth despite changing market demand. Its rich R&D pipeline is helping the company to maintain strong momentum of new product launches. Thus, it is expected that the stock will see a price target of Rs.4597 in 8 to 10 months.
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Prestige Estates |Sector: Realty | CMP: Rs 458.25 |Target: Rs 535
Despite the challenging environment, Prestige has clocked highest quarterly sales and collections. The new sales were backed by the healthy response to newly launched project, Prestige Great Acres and the existing inventories across geographies. Thus, it is expected that the stock will see a price target of Rs 535 in 8 to 10 months.
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(The above list has been prepared considering the risks & challenges that lies before the capital market and the economy in general and the CMP has been taken as on December 2022.)