LIC raises stake in these Nifty firms; should you too?

Life Insurance Corporation of India (LIC), the biggest domestic institutional investor, increased its stake in at least 21 Nifty firms during the March quarter when the benchmark BSE Sensex gained 2.50%. Brokerages have also given a thumbs up to these select stocks.

LIC most favoured Nifty stocks
The latest shareholding data showed that the insurance behemoth upped its stake in Bajaj Auto to 7.95% from 1.55% in the December quarter. Likewise, it further hiked its stake in NBFC major Bajaj Finserv to 1.50% from 1.42%.

Oil retailers BPCL and Indian Oil, telecom major Bharti Airtel and FMCG firms Britannia Industries, Nestle and Hindustan Unilever also attracted LIC during the quarter. It also raised its holdings in pharmaceutical major Cipla, two-wheeler major Hero MotoCorp and metal firms JSW Steel and Hindalco.

IndusInd Bank, Kotak Mahindra Bank, NTPC, Reliance Industries, Tech Mahindra, HCL Technologies, UltraTech Cement and UPL stood among other players in which LIC raised its holdings.

Stocks to buy

HCL Technologies: Among the stocks in which LIC increased its holdings in Q4FY21, Angel Broking is positive on HCL Technologies with a price target of Rs 1,161. “HCL Tech is amongst the top four IT services companies based out of India and provides a vast gamut of services. Management has highlighted that demand and supply related issues are now over for the company and the deal pipeline has improved significantly since September led by cloud related services,” the brokerage said.

Nestle: KR Choksey has ‘Buy’ on Nestle with a price target of Rs 19,640. “Nestle India has performed relatively better with sustained growth in the volume and product mix. Amidst lockdown, we expect the growth momentum to continue in the near term, especially for its ready to cook products,” KR Choksey said.

Tech Mahindra: Improving deal pipeline, focus on large deal wins, traction in 5G spend (on communication & enterprise side), the revival of growth in manufacturing, acceleration in Europe and cloud is expected to drive revenues of the company, according to ICICI Securities. It further believes that improving margin trajectory and attractive valuations are positive for the stock. ICICI Securities has ‘Buy’ on Tech Mahindra with a price target of Rs
Rs 1,120.

Hero MotoCorp: Anand Rathi Financial Services is positive on Hero MotoCorp with a price target of Rs 3,300. It believes that the stock could remain in the demand zone after the recent correction. “Traders are advised to buy the stock in the range of Rs 2,920- 2900 with a stop loss of Rs 2,710 for the upside potential target of Rs 3,300 in 1 – 3 months,” it said.