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These are the top 10 stock to buy in July, according to Axis Securities

These are the top 10 stock to buy in July, according to Axis Securities
BCCLThe Indian stock markets have rallied sharply in June on the back of positive foreign fund inflows triggered by hopes of a vaccine launch for COVID-19 sooner than expected. With Sensex gaining over 24% since March 31, it might seem that all of the great buying opportunities have passed us by. But here are few of the top stocks to watch out for in July, according to Axis Securities.

Axis top picks basket delivered a return of 9.4% since the launch in the month of May with 9 out of 10 picks registering positive gains.

These are the top stocks to watch out for in July and rationale given by the fund house:

​ICICI Bank Ltd

​ICICI Bank Ltd
BCCL

Current Price: ₹360.80

Target Price: ₹495

Implied gains in the next one year: 27%

According to Axis Securities, the recent price correction offers another attractive entry point into the stock. It believes ICICI Bank offers the best risk-reward among our bank coverage given a healthy, sustainable earnings outlook.

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​Manappuram Finance Ltd

​Manappuram Finance Ltd
BCCL

Current Price: ₹161

Target Price: ₹173

Implied gains in the next one year: 7%

Manappuram Finance can sustain its performance in a critical business environment which has been tough for most non-bank financial institutions due to its well-matched ALM profile, strong liquidity, cost controls, stable asset quality and tailwind from high gold prices, according to Axis.

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​Varun Beverages Ltd

​Varun Beverages Ltd
​Varun Beverages

Current Price: ₹700

Target Price: ₹804

Implied gains in the next one year: 13%

Despite the lockdown effect on Varun Beverages Q1 earnings, VBL has multiple long term growth drivers such as lower product ticket size to aid quicker recovery in volumes compared to other discretionary items. Axis also believes that the highly underpenetrated soft drinks, juices category in rural areas and its working capital efficiency shall aid VBL in sailing through the current challenging conditions.

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​CCL Products India Ltd

​CCL Products India Ltd
​CCL Products

Current Price: ₹240.70

Target Price: ₹267

Implied gains in the next one year: 9.8%

CCL Products is well placed to capture the growing In-home consumption of instant coffee driven by its expertise in customized blends and cost-efficient business models. It is the largest manufacturer and exporter of instant coffee in India with steadily improving the branded retail business.

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​Minda Industries Ltd

​Minda Industries Ltd

Current Price: ₹288

Target Price: ₹318

Implied gains in the next one year: 9.4%

Axis securities maintain a bullish outlook on MNDA’s ability to comprehensively beat industry performance by leveraging the broader vehicular trends of industry like EV, premiumization, automation. Its strategic inorganic acquisition will enhance product offering and gain market share. Its deep-rooted relationship with OEM’s will also increase its kit value, according to Axis Securities analysts.

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​ITC Ltd

​ITC Ltd

Current Price: ₹206.85

Target Price: ₹230

Implied gains in the next one year: 10%

ITC’s healthy cash balance of ₹300 billion would enable it to sail through challenging times posed by COVID-19 outbreak. Post-COVID, the progressive normalization of operations across segments, share gain possibilities in the core cigarette business, quicker recovery in FMCG sales given increased in-home consumption and consumers’ preference towards trusted brands could support a quicker recovery in earnings.

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​Bharti Airtel Ltd

​Bharti Airtel Ltd

Current Price: ₹583.10

Target Price: ₹650

Implied gains in the next one year: 10.2%

Regulatory challenges are well known, and Bharti Airtel is well-capitalized to deal with the payouts as it has raised enough capital (₹450 billion equity in FY20) and has access to debt as there are no major business solvency risks associated with it, the report cited.

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​Biocon Ltd

​Biocon Ltd

Current Price: ₹397.20

Target Price: ₹474

Implied gains in the next one year: 16.2%

The Biocon’s contract research segment (Syngene) is expected to post revenue growth in low teens while the branded formulations business is expected to grow at low single-digit driven by additional capacity and entry into newer markets. It has also received the USFDA’s approval for its Insulin Glargine (Semglee) which paves the way for the launch in the US market currently controlled by Eli Lily and Sanofi.

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​MindTree Ltd

​MindTree Ltd

Current Price: ₹943

Target Price: ₹1088

Implied gains in the next one year: 13.3%

According to analysts, MindTree’s Management initiated strong cost control measures like reducing the subcontractors, better service mix and higher execution will help to gain long term sustainable operating margins.

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​HCL Technologies Ltd

​HCL Technologies Ltd

Current Price: ₹578.45

Target Price: ₹653

Implied gains in the next one year: 11.4%

Recent deal trends continue to be healthy for HCL tech and are reflective of traction in retail and Consumer packaged goods, manufacturing and BFSI verticals. HCL Tech has received various digital transformational deals worth more than $2.4bn in the quarter ended December. Axis Securities believes that COVID outbreak will create a huge opportunity across geographies for HCL Tech to post strong organic growth over different verticals.

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COVID-19IndiaCases: 1.96MDeaths: 40.6kRecovered: 1.32M
COVID-19WorldCases: 18.35MDeaths: 696kRecovered: 11.30M
COVID-19USACases: 4.67MDeaths: 154kRecovered: 1.57M