5 high conviction Nifty 50 shares to buy; top large-cap growth picks amid volatility

Indian share markets snapped the five-month gaining streak in September and lost over 2 per cent. BSE Sensex and Nifty 50 gained nearly 3 per cent in the previous month. Research and brokerage firm Emkay Global Financial Services has chalked out a list of large-cap stock picks with strong fundamentals and positive outlook. The brokerage firm has maintained a ‘buy’ rating, seeing the growth opportunities in them. The list includes stocks from the banking sector to the two-wheeler sector. The firm sees potential upside in them amid share market volatility. In September BSE Sensex lost 2.1 per cent while the broader Nifty 50 index fell 1.9 per cent from the end of August.

BPCL: Bharat Petroleum Corporation Ltd reported a strong set of numbers in the first quarter of the current fiscal on strong marketing margins. The brokerage firm has pegged a target price of Rs 480, an upside of 35.5 per cent from the previous close. Emkay believes that marketing margins though not high in Q1 would still remain healthy, driving marketing profitability. It noted that the strategic disinvestment process is on and as private and global interests emerge, the stock could see further rerating.

Hero MotoCorp: Emkay sees reasonable valuations in light of growth prospects, strong ROCEs and healthy free cash flows. Hero MotoCorp has been working on strengthening presence in premium motorcycles, and the recent launch of Xtreme 160R is a positive step in this direction. Emkay in its report highlighted that refreshes are expected from FY22 and multiple products are expected to be launched in the premium segment (150-400cc) over the next 3-5 years.

SBI: State Bank of India one of the lowest GNPA ratios among PSBs at 5.4%, while we believe that the bank could be a significant beneficiary of any re-acceleration in the corporate resolutions. Emkay likes SBI for its enviable liability profile, higher retail orientation, reasonable capital position and cheap valuations post stripping-off subsidiaries’ valuations. “The risk of Yes Bank bail-out by SBI too is off the table with Yes raising more than survival capital recently without the support of SBI,” Emkay Global Financial Services said.

NTPC: Power demand has been witnessing an uptrend since the beginning of the unlocking phase in June and September is expected to witness on-year growth in power generation. Emkay said Q3FY21 should witness a rise in demand due to the revival in economic activity, departure of monsoon and the beginning of the festive season. “This will benefit NTPC, as the company is set to commercialize 3.5GW capacity in FY21,” it said.

UPL: Emkay believes that UPL is on the path to re-rate from its 5-year low valuations toward its 5-year mean valuations due to continued market share gains, margin improvement on the back of synergies and reduction in adjusted net debt/EBITDA by FY22E which could trigger a rating upgrade in FY22.

(The stock recommendations in this story are by the respective research and brokerage firm. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)