Bull run to continue; HDFC Bank, Inox Leisure, Ashok Leyland among top 20 stocks to buy now

Amid the ongoing bull run on Dalal Street, Prabhudas Lilladher believes that the benchmark NSE Nifty may touch the 17,745-mark by September 2022. The 50-share index advanced 130 points to hit a new lifetime high of 16,835 in the early trade on August 30.

The brokerage believes that India is on the verge of capex led recovery led by government, private sector capex in steel, cement, smart infra, chemicals, pharma and PLI push. It turns overweight on auto, pharmaceutical and equal weight on IT services. “We retain overweight on metals, increase weights on industrials and cement,” it said.

Bull case target

In the bull case scenario, Prabhudas Lilladher projected that the Nifty may hit 21,020. However, it said that the third Covid wave, lower bond-buying by the US Fed, any increase in repo rate by RBI, global capital flows and geopolitical instability are some of the key risks to the bull case scenario.

In the recent development, the government has announced an ambitious Rs 6 lakh crore National Monetisation program which will act as a finance mechanism for building world-class infrastructure in India. Monetisation will take place under 1) Brownfield Public-Private Partnership (PPP) model like operate maintain transfer (OMT), toll operates transfer (ToT) and 2) structured finance vehicle like InvITs and REITs. Roads (Rs 1.6 lakh crore), Railway (Rs 1.5 lakh crore) and power (Rs 0.9 lakh crore) are among the top sector in value terms to be monetised of over 20 asset class.

“We believe asset monetisation will act as a financing tool for government and boost spending in infrastructure,” Prabhudas Lilladher said.

Top stocks to buy now

Considering the present market environment, the brokerage is positive on at least 20 stocks. In the largecap space, it likes players like HDFC Bank with a target price of Rs 1,870. Infosys (TP: Rs 1,847), HDFC (TP: Rs 3,028), ICICI Bank (TP Rs 815), Avenue Supermarts (TP: Rs 3,744), Larsen & Toubro (Rs 1,855), Sun Pharma (Rs 922), Hindalco (Rs 500), Mahindra & Mahindra (Rs 961), Ambuja Cement (Rs 460), Mphasis (Rs 3,348), Cholamandalam Investment (Rs 600), Indraprastha Gas (Rs 662) and HPCL (Rs 404) are among other major favourites of Prabhudas Lilladher.

“We retain overweight on banks as best play on recovery and infra with a minor change in weights of HDFC and IIB,” Prabhudas Lilladher said in a report.

Ashok Leyland, Crompton Greaves, Endurance Technologies, Westlife Development, Rallis India and Inox Leisure are among other top stocks of the brokerage in the midcap and smallcap segments.