Top Picks For July Include Tech Mahindra, ICICI, and SBI; Analysts Predict A Rally Of Up To 70% This

Updated: Jul 17

Stocks to Buy in July: The Sensex and Nifty both saw corrections of more than 8% each in June 2022, their worst monthly results since March 2020. However, the weakness can still be present. Mid and Small Caps fell by 7% apiece MoM throughout the month, despite the market as a whole exercising more caution. Similar to May 22, June 22 also proved to be a turbulent month, driven by weaker global cues like higher inflation data from the US market, an increase in US 10-year bond yields, and other factors. and a 75 basis point rate increase implemented by the US FED to control inflation. Amid the mounting uncertainty, two crucial occasions—the US FOMC meeting and the RBI MPC—were scheduled for June 22, but are already over their due dates.

"In line with expectations, all central banks are now focusing on managing the inflationary pressure by front-loading the raising rates in the next six months," stated analysts at Axis Securities. With this in mind, it is important to pay close attention to how the sustainable demand picture develops shortly. In any case, we anticipate that inflation will reach greater levels in the next months but that it will moderate in the following quarter or quarters.

ICICI Bank, Bajaj Auto, Tech Mahindra, Maruti Suzuki India, State Bank of India, Bharti Airtel, Cipla, Federal Bank, Varun Beverages, Ashok Leyland, Astral Ltd (India), Bata India, APL Apollo Tubes, HealthCare Global Enterprises, Praj Industries, and CCL Products are among the top trading ideas selected by Axis Securities for July (India).

A few of these stocks from the July basket are listed below:


One of the biggest private sector banks in India, ICICI Bank (ICICIBC) conducts business primarily in the insurance, corporate, and retail sectors. The bank has been beating its competitors and checking off the majority of growth, margin, and asset quality boxes. Increased loan growth, rising operating profitability, a robust provision buffer, and a robust deposit ratio

Over FY23–24E, the franchise will assist the bank in increasing ROAE/ROAA. In terms of value, we think the bank is still in a good position. We keep our Buy rating on the stock and have lowered our target price to Rs1,000 per share (SOTP basis core book at 2.8x FY24E and Rs 173 Subsidiary value).

Bajaj Auto

Bajaj Auto (BAL) continues to be India's top exporter of two-wheelers (2W) and is still the second-largest player in the domestic motorcycle market (19% market share). Bajaj Auto appears to be taking advantage of the 2W market's tendencies toward demand normalization and premiumization, which should enhance future profitability and operational performance. Additionally, due to the company's market leadership position, strong brand equity, and expanded distribution network, we anticipate continued growth in exports. Given its fair values and promising medium-term growth prospects, Bajaj Auto continues to be our top selection in the 2W market. To arrive at a target price of Rs 4,350, we maintain our BUY recommendation on the company and value it at 17.5x FY24E EPS.

Tech Mahindra

The top provider of IT services in India according to numerous corporate giants is Tech Mahindra. We think Tech Mahindra has a better mix of services and numerous long-term contracts spread out across the different industries, which lessens its reliance on any particular industry. Additionally, we anticipate strong momentum in the enterprise and communications verticals, which will significantly speed up the company's revenue growth going forward. To arrive at a target price of Rs 1,700 per share, we give the stock a BUY recommendation and multiply the company's FY24E profits of Rs 83.7 per share by a 20x P/E multiple. Inferred by TP is a 70% increase from CMP.

Maruti Suzuki

With a market share of roughly 45%, Maruti Suzuki India Ltd. (MSIL) is the market leader in the domestic passenger automobile sector. The overall product mix is probably going to improve as a result of new launches intended to fill in the gaps in its portfolio. The corporation would increase its market share as a result of an anticipated shift toward gasoline and CNG automobiles. Moving forward, we anticipate a combination of product upgrades and new model releases for new product launches. Throughout FY22–24E, we anticipate a CAGR of 16% for the company's volumes. With a Target Price of Rs 9,800, the company is valued at 27x its FY24E EPS and carries a BUY rating from us.

State Bank of India

In terms of assets, deposits, branches, customers served, and employees, the State Bank of India (SBIN) is the largest public sector bank in India. SBI continues to be the PSU banks' best bet on the

steady economic resurgence in India due to its strong PCR,

a solid liability franchise, substantial capitalization, and an enhanced asset

a good outlook. Normalization of credit cost trends and enhanced

The prognosis for growth should result in double-digit ROEs of 14–15% over

FY23-24E. In light of this, we continue to recommend buying the stock and have

target price of Rs. 665/share (SOTP basis, core book at 1.3x) has been revised

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