Stocks to look out for in 2011
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Jan. 3: The year gone by may have been bad for corporate India as they were hit by several scandals, but the share market delivered good gains for investors. Analysts feel that many of the favourites of 2010 may continue to deliver a strong performance in 2011 as well. The consensus is clearly towards the heavy weights such as L&T, Reliance and ONGC.
Ms Madhabi Puri Buch of ICICI Securities has identified Axis Bank, TCS, Gail, Oil India, HCL, L&T and Lupin as the large stocks most likely to deliver strong returns in a strategy report. The reason for the optimism is that the sectors to which these firms belong — banking, IT and energy are likely to do well. The IT sector seems to be a favourite for other analysts too, as it comes out of the shadows of the global recession.
Capital goods firms such as L&T and BHEL are expected to well because of the strong demand scenario in India. Both the companies feature amongst the top global picks of 2011 drawn up by Merrill Lynch. Other stocks identified by the broker include ICICI Bank, SBI, ONGC and Reliance – all amongst the largest Indian firms. Surprisingly, the brokerage is neutral on newly listed Coal India, as it may miss targets due to logistic contstraints.
Reliance is a favourite pick of other analysts as well. The stock is likely to do well because it has not participated in the momentum of the past 18 months and because of increased production from the KG Basin, says Mr Jagannadham Thunuguntala of SMC Securities. M&M, SBI and L&T are the other companies he is keeping an eye on. RIL has also been identified as a top pick by IIFL. The firm has underperformed the Sensex by 21 per cent last year. Other stocks identified are L&T, M&M, SBI and Tata Steel.
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