04 Jun , 2021 By : Kanchan Joshi
In a catch-up rally with the global market led by the downward trajectory of the Covid-19 curve, the Mid and Smallcaps delivered significantly higher return as against returns by the Largecaps. Axis Securities in a recent note said that the broader market continues to look attractive at current levels. It expects the Mid and Smallcap theme to stay in FY22.
It has also maintained its Nifty December 2021 target at 16,100. ''Notwithstanding near-term challenges, the overall market structure continues to remain positive. Sector rotation and the stock-specific approach will be keys for outperformance, moving forward,'' it said.
‘Currently, Midcaps are trading at a discount to the Largecaps and offer good upside potential. We maintain our December 2021 target at 16100 (valuing at 22x FY23 earnings). With this backdrop, we have made some changes in Top Picks recommendations. We book solid profit in Relaxo footwear while adding PI industries and Mold-tek packaging to our top picks.’’ Axis Securities added.
Based on the themes, it has recommended the following stocks:
Under the financial sector, SBI, ICICI Bank, Federal Bank and Equitas Small Finance Bank are its top picks whereas Tech Mahindra and HCL Technologies are its top recommendations under the information technology (IT) sector.
Bharti Airtel, Varun Beverages, Mold-tek, PI Industries, Amber Enterprises, Camlin Fine Science, Minda Corp, Steel Strip Wheels, Lupin and ACC are among the other top picks for the month of June 2021.
The brokerage is overweight on sectors like IT, metals and mining, specialty chemicals and telecom whereas it has an underweight stance on the oil and gas sector. ''The O&G sector has its own set of challenges because of lower GRMs and demand scenario. While the OMCs (oil marketing companies have seen excellent marketing margins, the sustainability remains questionable,'' Axis said.
As market awaits a timely unlocking of the economy, Axis said any delay in unlocking the economy beyond June will be a key risk in the near term.
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