While presenting the budget for FY 2021-22, Finance Minister Nirmala Sitharaman took a number of corrective steps to boost the economy, the biggest step being the announcement of increase in capital expenditure for the next several years. Global brokerage firm Bank of America Securities (BofA) in its report hoped that the Indian government would continue to rollout new reforms to boost FDI and funding with manufacturing.
In view of this, Bank of America is overweight on finance sector, industry sector and infrastructure along with material sector. The brokerage firm expects stocks in these sectors to offer higher profits in the future. At the same time, it has suggested that investors stay away from consumer durables.
Bank of America said in its report that by FY22-23, companies in these sectors can get projects worth $ 356 billion, or Rs 25.82 lakh crore. At the same time, market experts expect the government to cut subsidies to increase capital expenditure. Bank of America has suggested placing bets on these 5 stocks for coarse returns …
Larsen & Toubro
Global brokerage firm Bank of America says Larsen & Toubro will benefit the most from the government’s increase in Capex due to the diversified segment and strong balance sheet. Also, the company’s earnings growth and returns on equities are at a historical low, so the company is expected to accelerate its stock on getting new projects.
Bank of America has increased the target price of Larsen & Toubro stocks from Rs 1663 to Rs 1780. The shares of the company closed at Rs 1474 today. That is, the company will give 21% return this year.
Adani Ports and SEZ
Adani Ports has acquired a 31.5% stake in Gangavaram port with the acquisition of Dighi Port. The brokerage firm hoped that the growth potential of the company would further boost its stocks. Bank of America has given a target price of Rs 865 for its stocks. The shares of the company closed at Rs 715.50 today. That is, the company will give 22% return to its investors.
Voltas has more than 27% market share in the business of cooling products. At the same time, the company is expected to increase sales due to the possibility of more heat this year. The shares of the company are currently trading at Rs 1030. While the brokerage firm has given its target price of Rs 1187. That is, the company will give more than 15% returns to its investors this year.
The company has targeted to increase the renewable energy production capacity to 32GW by 2030. There is a trend towards renewal energy for energy needs around the world. The company will benefit from this. Also, the company has a very strong balance sheet to support the growth portfolio of the company. Because of this, the brokerage firm has given its target price of Rs 114. NTPC shares closed at Rs 109.65 today.
The brokerage firm has suggested investors to place bets on Bharat Electronics, given its strong fundamentals and the potential for growth in orders that the company receives. The shares of the company closed at Rs 137.50 today. Bank of America has given a target price of Rs 156 for its stocks. This means that the company can give 14% return to its investors this year.
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