The 10 Stocks Analysts Think Will Return Best Gains

Indian equities are having their best run in seven months amid optimism about an economic recovery as the nation gradually reopens after two months of complete lockdown to contain the new coronavirus outbreak.The Nifty 50 Index jumped more than 1,000 points over the past week. All sectoral indices gained, with financials, realty and metals outperforming the benchmark. That has turned analysts even more optimistic on select stocks despite more than 20% rebound since May 26.Selection CriteriaStocks with a market capitalisation of at least Rs 5,000 crore.Tracked by at least five analysts.Highest return potential over the next 12 months..Here are the 10 stocks with the highest 12-month return potential:.Aditya Birla Capital.A strong parent with adequate resources to support the company’s requirements, established franchise with a spread-out portfolio and well-matched asset liability tenors are the key reasons that turned analysts bullish..Cholamandalam Investment & Finance.The Murugappa group flagship is one of the top picks in the non-bank lending space, with more than 90% of the analysts tracked by Bloomberg having a ‘Buy’ rating.Over the long term, analysts say, the company is better placed to grab market share in vehicle-financing segment, aided by wide geographic reach and positive management commentary on a speedy recovery because of its higher presence in rural markets (80% of total business)..IndusInd Bank.Analysts are betting on the private lender because of an improvement in its core profitability, supported by better net interest margin, steady growth in retail segments such as microfinance, and attractive valuations. But asset quality remains a key concern due to its higher exposure to stressed sectors..Phoenix Mills.Analysts expect the nation’s largest mall operator to reach optimal operational efficiency ahead of other developers, aided by ample cash reserves, minimal debt and ability to attract customers..Jindal Steel & Power.Brokerages turned bullish after the steelmaker reported better-than-expected results in the quarter ended March. Volume ramp-up at the company’s Angul, Odisha plant, a strong order book and higher utilisation of power plant are other factors that pumped up optimism..Axis Bank.Improved operating performance, sustained loan growth momentum in the fourth quarter and attractive valuations helped the private lender gain investor trust. But asset quality remains a concern due to its higher exposure to stressed sectors..Indian Hotels.The hospitality sector’s earnings are set to fall in the ongoing fiscal as the Covid-19 pandemic has so far caused a washout. But analysts expect Indian Hotels to recover faster than peers, driven by its strong brand equity, pan-India footprint, leadership in the deluxe category and better performances of subsidiaries. Attractive valuation is another reason that goes in its favour..Federal Bank.Better operating performance in the quarter ended March, lower cost of funds compared to other mid-sized banks and lesser stressed assets worked in its favour..Tata Power.Analysts bet on the private power generator because of its improved operational performance in the quarter ended March, focus on reducing debt and favourable valuations..Oberoi Realty.Healthy liquidity cushion, lowest debt among peers and expectation of minimum impact on office portfolio should help the real estate developer to tide over the prolonged shutdown caused by the Covid-19 pandemic, analysts said..(The reasons are compiled from research reports of brokerages, including Emkay Global, Antique Stock Broking, Edelweiss Research, Centrum Broking, Motilal Oswal and Elara Capital, among others.)

The 10 Stocks Analysts Think Will Return Best Gains

The 10 stocks with the highest 12-month return potential...

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