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Festival season has commenced in full swing with Ganesh Chaturthi being the latest one. The upcoming months are packed with a host of festivals such as Karva Chauth, Navratri, Diwali, and Christmas among others. Amidst these festivals, the demand for consumer products is generally high. Currently, various catalysts have triggered renewed excitement in the air during these festivals. That said, a list of six stocks can be added to your portfolio as an investment option. These stocks are Axis Securities festival demand picks.
Earlier this week, in its report, Axis Securities said, Festivals are times that bring life to a state of enthusiasm, creating mind space and good vibes among all of us and making the overall environment conducive for the demand generation, especially for the consumer products in the economy."
"After witnessing two muted years which were impacted due to intermittent Covid-19 disruptions, the spirit of celebration is finally back to its pre-Covid levels. This year, the excitement seems to have reinvigorated and economic activities are picking up momentum, thanks to the large-scale vaccination drive undertaken by the government of India (which crossed the remarkable milestone of 213 Cr by 4th Sep’22)," the report added.
According to Axis Securities, multiple catalysts are triggering renewed excitement in the air. These are:
1. The Indian economy’s remarkable resilience in FY23 to date with an uptick visible in most of the high-frequency indicators.
2. The Indian economy’s remarkable resilience in FY23 to date with an uptick visible in most of the high-frequency indicators.
3. Improvements in urban demand with rural demand, too, are on the verge of improvement as normal monsoon is reviving confidence in demand recovery in rural India.
4. Fully functioning contact-intensive services sectors such as Travel & Tourism, Hotels, Schools, and Colleges post COVID 3.0. In addition, all public transport systems like Air, Rail, and Bus are also now fully operational, supporting fast and resilient recovery in economic activities.
5. Remittances (major contributors to rural income) are likely to return to pre-Covid levels with the pick-up in the services sectors.
6. Easing supply chain conditions and cool-off in commodity prices, providing a breather from high inflation. In this context, the market narrative has shifted from inflation concern to a cool-off in inflation expectation in the next one or two quarters.
Based on the above themes, Axis Securities note said, "we recommend the following stocks that are well-placed to be the beneficiaries of robust festival demand: Maruti; Bajaj Finance; SBI Cards; Trent, Relaxo; V-mart."
These six stocks are seen as long-term wealth creators. Axis Securities' time horizon for these stocks is 6-9 months.
These six stocks are top picks of Axis Securities in festival season:
Maruti Suzuki
On BSE, Maruti Suzuki shares ended at ₹8,945.70 apiece up by ₹158.05 or 1.80% on Friday. The company's market cap is around ₹2,70,231.76 crore.
In a year, the shares have risen by at least 31.5%. The shares were around ₹6,801 apiece on September 9 last year. Its sales climbed by 50.52% yoy to ₹25,286.3 crore. Revenue from operations came at ₹26,499.8 crore, up 49% YoY for the quarter under review, however, down 0.8% QoQ.
For the June 2022 quarter, the company posted a net profit of ₹1012.8 crore rising by 129.76% compared to ₹441 crore in the corresponding quarter last year.
Axis Securities has given a buy rating with a target price of ₹9,801 apiece on the stock.
On Friday, the NBFC's shares closed at ₹7,183.55 apiece down by ₹74.45 or 1.03% on BSE. The company's market cap is around ₹4,34,913.12 crore.
Bajaj Finance shares have witnessed a volatile year and its performance has been slightly lower by a little over 3% compared to September 9 last year's level. However, the shares have recovered strongly in the last three months, with gains of nearly 22%.
Bajaj Finance witnessed a strong June 2022 (Q1FY23) quarter with net profit rising by a whopping 159% to ₹2,596 crore compared to ₹1,002 crore in the same quarter last year. Net interest income (NII) climbed by 48% to ₹6,638 crore in the quarter under review from ₹4,489 crore in Q1FY22. During Q1FY23, new loans booked jumped by 60% to 7.42 million as against 4.63 million in Q1FY22.
Axis Securities set a target price of ₹8,250 apiece on the stock.
On BSE, SBI Card shares closed at ₹943.60 apiece down by 1.69% on Friday. The NBFC's market cap is around ₹89,011.67 crore.
Although the stock has dipped nearly 15% in a year. However, in the past three months this year, the shares have made a robust recovery and picked up by over 22%.
During Q1FY23, SBI Card registered a growth of 105.80% in net profit to ₹626.91 crore compared to ₹304.61 crore in the same quarter last year. Revenue from operations stood at ₹3,100 crore in Q1FY23 rising by 31% yoy and 9% qoq. Interest income came in at ₹1,387 crore in Q1 of this fiscal climbing by 20% yoy and 10% qoq.
Axis Securities has given a target price of ₹1,050 apiece.
On BSE, Trent shares closed at ₹1,379.35 apiece lower by 1.98%. The company's market cap is around ₹49,034.16 crore.
In a year, the shares have climbed by nearly 35%.
In the first quarter of FY23, the company registered a consolidated net profit of ₹114.93 crore against a loss of ₹138.29 crore in the same period last year. Revenue from operations was at ₹1,803.15 crore - strongly up from ₹491.99 crore in Q1FY22.
Axis Securities has given a target price of ₹1,530 apiece on the stock.
On BSE, Relaxo Footwears shares closed at ₹1,012.90 apiece marginally up on Friday. The company's market cap is around ₹25,213.72 crore.
In the last three months, the shares have gained nearly 3%.
During Q1FY23, the company posted a net profit of ₹38.67 crore versus ₹30.96 crore in Q1FY22. Revenue from operations was at ₹667.15 crore higher than ₹497.13 crore witnessed in Q1FY22.
Axis Securities has given a target price of ₹1,120 apiece on the stock.
On BSE, V-Mart shares have closed at ₹2904.30 apiece up by ₹8.35 or 0.29% on Friday. The company's market cap is around ₹5,741.33 crore.
In Q1FY23, the company posted a net profit of ₹20.45 crore against a loss of ₹28.71 crore in Q1FY22. Revenue from operations stood at ₹587.88 crore in Q1FY23 against ₹177.41 crore in Q1 of FY22.
Axis Securities has given a target price of ₹3,350 apiece on the stock.