Top Picks 2022: 16 Stocks To Buy As Suggested By Axis Securities

Axis Securities, a brokerage company, is bullish on the top 16 stocks across the large cap, mid cap, and small cap space, despite current concerns concerning global turmoil.

The brokerage has noted "Mar'22 is expected to be an eventful month marked by the FED meeting, state election results, and LIC IPO. Furthermore, the direction of the oil prices, bond yields, and Dollar Index along with the development of the current geopolitical events will further drive the market fundamentals. Once the dust over Russia- Ukraine conflict settles, the market is expected to refocus on earlier key events such as inflation and the central bank's view on the number of rate hikes in the current calendar year. The FED stance in the upcoming FOMC meeting would be the deciding factor for the overall market direction in the short term. Against the present context, Oil will be the dominating consideration in the FED's analysis of the prevailing situation. On the possibility of a cut in global growth, the FED may slow the pace of rate hiking. But we cannot rule out the possibility of an aggressive FED stance if it foresees a sharper pick-up in inflation."

Axis Securities has said "Volatility which is gauged by India VIX, traded in the range of 19 to 21 for the most of Feb'22. However, it spiked in the last one week, especially on 24th Feb after the announcement of Russia inflicting a military attack on Ukraine. The ensuing panic was reflected in the market as volatility shot up sharply and India VIX closed at the level of 32 (on 24th Feb'22) which is higher than the long-term average of 22. This clearly indicated the depth of panic which intensified selling in the broader market. We believe volatility is likely to stay for some more time before it concludes in a concrete direction. And any further rise in the volatility from current levels will be a short-term risk to the market, making volatility direction a critical factor for the short term performance of the market."

The brokerage claims that "Large Caps will find an edge in the short term: We believe the style and sector rotation has been the key factors to achieve satisfactory returns moving forward. The Quality theme has been the best performer in the last one month as geopolitical tensions spiked the market volatility. Value and Momentum themes stood as our topperforming styles in the last three months and Value continues to be a robust theme over a slightly longer time horizon. As the economy improves, Value stocks will witness significant improvement in the financial matrix. Selected Value stocks under Metals, Commodities and BFSI space are wellplaced to deliver superior performance, particularly when we factor in the recent correction in the market."

"The Quality theme may outperform the broader market from the current levels considering a notable market correction and significantly increased volatility in the last three months. Furthermore, Quality stocks would provide superior long-term risk-reward in the current environment marked by a notable increase in volatility in the last two weeks and hence Large Caps will find an edge over the broader market for the short term. Once the heat between Russia-Ukraine settles, Value is likely to emerge in the Small and Mid Cap space, providing attractive investment opportunities in the broader market as the earnings outlook remains constructive," it further noted.

As per the brokerage "We maintain a Nifty target of 20200: We continue to hold a positive long-term view on the market supported by the emerging favourable structure as increasing Capex spending is enabling banks to improve credit growth. Moreover, the overall boost in the Union Budget 2022- 23 expenditure will help deliver broad-based growth in FY23. Though earnings momentum has been strong in the past few quarters and largely in line with expectations for the current quarter, it continues to be the critical factor for the market performance moving forward. Cumulative and rolling net profit of NSE 500 universe for the last 4 quarters touching an all-time high (crossed 9 Lc Cr in Q3FY22) is a key positive for the market. We foresee FY22/23/24 Nifty EPS at 728/844/918 with a 20% CAGR growth over FY21-24. We maintain our Dec'22 NIFTY50 target of 20200, valuing it at 22x FY24E earnings."

"Based on the above themes, we recommend the following stocks: ICICI Bank; Bajaj Auto; Tech Mahindra; Maruti Suzuki India; State Bank of India; Hindalco Industries; Bharti Airtel; Federal Bank; Varun Beverages; Ashok Leyland; National Aluminium Company; Bata India; Krishna Institute of Medical Sciences; Equitas Small Finance Bank; Praj Industries; CCL Products (India)," Axis Securities has said.

Top Picks By Axis Securities

Sr No.	Category	Company	Target Price in Rs
1	Large Cap	ICICI Bank Ltd	990
2	Large Cap	Bajaj Auto Ltd	4,250
3	Large Cap	Tech Mahindra Ltd	2,060
4	Large Cap	Maruti Suzuki India Ltd	9,800
5	Large Cap	State Bank of India	720
6	Large Cap	Hindalco Industries Ltd	630
7	Large Cap	Bharti Airtel Ltd	810
8	Mid Cap	Federal Bank Ltd	125
9	Mid Cap	Varun Beverages Ltd	1,080
10	Mid Cap	Ashok Leyland Ltd	160
11	Mid Cap	National Aluminium Company Ltd	150
12	Mid Cap	Bata India Ltd	2,200
13	Small Cap	Krishna Institute of Medical Sciences	1,600
14	Small Cap	Equitas Small Finance Bank	80
15	Small Cap	Praj Industries Ltd	477
16	Small Cap	CCL Products (India) Ltd	585
Source: Axis Securities