ICICI Bank, State Bank of India and Housing Development Finance Corporation (HDFC) are some of the stocks that could benefit from India’s projected economic growth cycle, analysts at global brokerage and research firm Jefferies said. Analysts examined six components of the economic cycle, indicating that conditions are ripe for a repeat of the improvement in the 2003-2010 pattern. “Housing, NPL, and corporate profitability cycles have become convincingly positive. Corporate leverage is periodically low.” According to Jefferies, stocks from the banking and housing-related sectors could see an upward trend.
Banking sector stocks rise
ICC Bank: The private lender is among the chosen plays of the banking sector in India. Jefferies has ICICI Bank in its model portfolio with a 10.6% weighting and a buy rating. The stock is up 40% so far this year.
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IndusInd Bank: Analysts at Jefferies also added IndusInd Bank as their playground in the Indian economic cycle. The stock is up 35% so far this year and is currently trading at Rs 1,214 per share. Jefferies has a buy rating on scrip.
Central Bank of India: SBI, India’s largest public sector lender, has seen a strong performance this year. SBI’s stock price is up nearly 80% as the banking sector is up. Currently, the stock is trading at Rs 500 per share.
Housing and related stocks on the watch list
Godrej Characteristics: The stock has a buy rating from analysts at Jefferies and is part of the brokerage firm’s India portfolio at 6.4%. Since the end of August, the stock is up 70% and is now trading at Rs 2,452 per share.
Macrotech Developers: The recently listed stock of Lodha Developers has soared by a whopping 142% since it was first floated to the stock exchanges in April of this year. The stock is currently trading at Rs 1,127 per share. The stock was listed at a discount to the IPO price but has garnered a lot of interest from investors ever since.
DLF: The stock gained momentum in mid-September this year and since then is up 32% to now trade at Rs 424 per share.
HDFC: The country’s largest mortgage lender has done well since the end of July, up 17% to now trade at 2,823 per share. The stock has a 10.1% weighting in the Jefferies Models India portfolio.
ACC: Cement manufacturer ACC has received a buy rating from Jefferies. The share price has jumped 40% so far this year to now trade at Rs 2,275 per share.
Kajaria ceramics: Jefferies is bullish on Kajaria Ceramics, and expects the stock to extend its 85% year-to-date rally on the back of the housing sector boom. Currently, the share price is trading at Rs 1,308 per share.
Top Industries: Having gained more than 50% so far in 2021, Jefferies remains bullish on the stock. The stock is trading at 2,582 rupees per share on Tuesday.