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Business News/ Markets / Stock Markets/  Covid 2:0: Here are 9 stocks recommended by Axis Securities
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Covid 2:0: Here are 9 stocks recommended by Axis Securities

Axis Securities report said that the base for finalising these 9 shares are opportunities for the pharma, IT, consumer durable and commodity companies in Covid 2:0

Axis Securities has recommended 9 shares for stock market investors, which they can think of buying in this Covid-hit markets. (HT_PRINT)Premium
Axis Securities has recommended 9 shares for stock market investors, which they can think of buying in this Covid-hit markets. (HT_PRINT)

Analysing the Covid 2:0 impact on various sectors and the sectoral majors, the Axis Securities has recommended 9 shares for stock market investors, which they can think of buying in this Covid-hit markets. These 9 shares are Gland Pharma, Dr Reddy’s, Britannia, Wipro, Bharti Airtel, MindTree, Dalmia Bharat, ACC and Dhanuka Agritech. Axis Securities report said that the base for finalising these 9 shares are opportunities for the pharma, IT, consumer durable and commodity companies in Covid 2:0.

Boost for IT, telecom, pharma and consumer durable cos

Commenting upon the opportunity for IT, telecom, pharma and consumer durable companies in COVID 2:0 the research report says, "The IT sector will be unaffected by the domestic challenges and might even benefit from acceleration in digitisation initiatives undertaken by the Indian companies. The IT sector may also benefit from a stronger US Dollar. Similarly, the pharmaceuticals sector is likely to outperform and benefit from the domestic challenges and see earnings upgrade in the next 3 months. Dr Reddy’s and Gland Pharma are likely to benefit from the roll-out of Sputnik, which has been recently approved by the government. Consumer staples, too, are likely to see their growth trajectory unchanged as food companies experience a positive impact. Rural will continue to do well as the last cycle also indicated that the pandemic impact was lower than its urban counterparts. Export themes should outperform because of the significant pick in global activity."

Metal, commodity stocks to perform well

Predicting metals, commodities and other cyclical being well placed the Axis Securities report said, "Metal prices have continued to rise even during the second wave of the pandemic globally. Similarly, other commodities have also continued to rise. In this scenario, the metal stocks are well placed. Even though the cyclical plays such as cement and capital goods may see some disruption in demand intermittently, the demand surge post the pandemic is very likely. Thus, cyclical space is well placed to outperform during these challenges. Correction in cement stocks and others should be used to accumulate."

Auto, banking and financial stocks to remain under pressure

However, the Axis Securities report expected weakness in auto, banking and financial sector stocks due to strict Covid restrictions being impost in Maharashtra. The report highlighted that Maharashtra contributes 14 per cent in the national GDP and lockdown in the state will have direct impact on a wide range of consumption activities such as travel, tourism, restaurants, small ticket discretionary and many others.

"While there are not many listed players in small ticket discretionary consumption like restaurants but all these will impact the BFSI sector as it is a lender to SME and MSME segment. The pressure in the SME and MSME segment has been there for a while and this will exacerbate the challenges. Thus, a 10% reduction in BFSI earnings cannot be ruled out. Similarly, the Auto sector is expected to see challenges considering closed showrooms and lower capacity utilisation. While the sector may witness some pent-up demand, later on, it is unlikely to be as strong as the previous instance of 2020. Moreover, input costs are wreaking havoc on the Auto companies which they are already finding difficult to pass on. Thus, the profitability of the Auto sector will remain under pressure in 2021," the Axis Securities reported.

"Based on the above themes we recommend the following stocks BUY: Gland Pharma, Dr Reddy’s, Britannia, Wipro, Bharti Airtel, Mind Tree, Dalmia Bharat, ACC and Dhanuka Agritech," Axis Securities report finally concluded.

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Published: 23 Apr 2021, 03:55 PM IST
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