Stocks to buy this festive season: SBI Cards, HUL, Hero MotoCorp among 6 stocks looking to rally up to 20%

The domestic firm sees up to 20 per cent rally in these stocks on the back of festive season demand. Image: Reuters

Indian stock market benchmarks BSE Sensex and Nifty 50 surged nearly one per cent on Monday, after witnessing a correction of 2 per cent last week. Domestic research and brokerage firm Axis Securities has suggested buying six stocks — HUL, SBI Cards and Payment Services, Hero MotoCorp, Relaxo Footwear, Aditya Birla Fashion and Retail Ltd (ABFRL), and Safari Industries, as part of its festive ideas. The domestic firm sees up to 20 per cent rally in these stocks on the back of festive season demand. Currently, S&P BSE Sensex sits at 59,295.82, and the NSE’s Nifty 50 index at 17,700 levels.

Stocks to buy this festive season

Hindustan Unilever Ltd (HUL): The brokerage firm has given a target of Rs 3,110 apiece, a 3 per cent rise from the previous close. It likes Hindustan Unilever Ltd’s superior agility and nimbleness despite it being larger than peers in capitalizing on the emerging growth trends and remaining ahead of the competition. It says that the near term growth drivers like pick up in discretionary portfolio, tailwinds from GSK-CH integration and gains from investments in digitization, distribution are key growth enablers.

Hero MotoCorp: During the festive season, Hero MotoCorp stock may rally nearly 20 per cent from the previous close of Rs 2847.35. The firm has pegged a target price of Rs 3,400 apiece. The brokerage expects Hero MotoCorp to continue its dominance in the 2W industry driven by the benefits of premiumisation of its products, a strong foothold in the entry-level motorcycle segments, and aggressive product offerings in the scooters segment. Its partnership with Ather Energy, Harley Davidson and Gogoro will help increase its presence in new technology and premium segment bikes. Additionally, it sees a strong recovery in FY22 and FY23 driven by normalisation of the economy.

SBI Cards and Payment Services: The stock may rally over 15 per cent to Rs 1,210 apiece, from the previous close of Rs 1,046.20 apiece. SBI Cards and Payment Services has regained its lost momentum in terms of spends and customer sourcing as COVID 2.0 headwinds weakened. The brokerage firm noted that the positive trend on the asset quality front and a notably lower quantum of restructuring 2.0 provide relief. It also believes that the company has strong moats which will support robust long-term growth and aiding market share gains.

Relaxo Footwear: It will take Relaxo Footwear to jump 10 per cent from the last close of Rs 1,171.50 apiece. With a strong portfolio of footwear products and expansion in distribution reach (especially in southern markets), Axis Securities sees Relaxo well poised to achieve revenue and earnings CAGR of 19% and 22%, respectively, over FY21-FY24E. “Strong earnings visibility and strengthening of the balance sheet will keep valuations at a premium,” it said.

Aditya Birla Fashion and Retail: It has a target price of Rs 250, over 2 per cent gain from the last close. The brokerage firm said that over the years, ABFRL has built a strong brand with high growth potential catering to various categories in the fashion segments. The firm noted that lifestyle brands (Louis Philippe, Van Heusen, Peter England and Allen Solly) lead in the men’s formal and casual wear in the mid-premium and premium space and yield a healthy return over the medium term.

Safari Industries: Safari Industries’ stock price is set to jump over 8 per cent from the last close of Rs 851 apiece, during festive season demand. The brokerage firm has recommended buying the stock with a target price of Rs 922 apiece. “Although the company’s near-term earnings outlook remains clouded as travel and people movement continue to be restricted albeit better than previous periods, we think short-haul trips and marriage-led demand could support growth in H2FY22,” it said. The firm also noted key risks such as sudden spike in COVID cases and ensuing restrictions on travel; spike in RM costs; and rising competitive activity.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)