Mahindra & Mahindra Ltd., HDFC Bank Ltd. and Bharti Airtel Ltd. remained among Macquarie Equity Research’s top picks in its ‘India Super 6s – Best Buy Ideas’ report.
The framework categorises Macquarie’s top stock picks into three distinct segments – Six Stars (core holdings), Six Hitters (tactical opportunities), and Six Rising Stars (high-growth prospects).
Six Stars
The Six Stars represent Macquarie’s core, conviction-led portfolio, designed with a longer-term horizon in mind. This list includes M&M, HDFC Bank, Bharti Airtel, Trent Ltd., Power Finance Corp. and Tata Consultancy Services Ltd.
Despite strong showings from Mahindra & Mahindra and HDFC Bank, the list has marginally underperformed the MSCI India index since inception, with TCS notably weighing on overall returns, the brokerage said in its note. No changes were made to the Stars list in this update.
Bharti Airtel, Power Finance Corp. and Trent gave 7%, 4% and 1% returns respectively, since inclusion.
Six Hitters
The Hitters list is oriented toward more tactical, medium-term opportunities. It has delivered a respectable 14% return since its last update, driven primarily by 40% gains in Bharat Electronics Ltd. and a rebound in Reliance Industries Ltd. that gave 13% returns.
The key current constituents are Bharat Electronics, Reliance Industries, GAIL India Ltd., Shriram Finance Ltd., Larsen & Toubro Ltd. and Life Insurance Corp. of India. GAIL and Shriram Finance gave returns of 4% and 2%, respectively.
Macquarie in this list made two substitutions. While it removed Ultratech Cement Ltd. and NTPC Ltd., Larsen & Toubro was added for its strong order flows and LIC for its valuation support.
Six Rising Stars
The Rising Stars list includes stocks Macquarie believes could potentially double in value over a 2–3-year horizon. This group has been the standout performer, posting an average gain of 24% since inclusion.
Delhivery Ltd. which was up 55% and Aditya Birla Capital Ltd. which rose 35% were the top gainers in this list. The other names in this high-conviction list include Uno Minda Ltd., Indian Railway Catering And Tourism Corp., Lemon Tree Hotels Ltd. and Devyani International Ltd. Both Lemon Tree Hotels and Devyani International gave 9% returns each, while UNO Minda and IRCTC gave 19% and 10%, respectively.
Importantly, the Rising Stars lineup remains unchanged in June.
“Our broader market view remains guarded as we see earnings fatigue and need for an expectation reset. However, as an offset, liquidity (both domestic and now foreign flow) and central bank policy remain supportive,” the brokerage added in its note.
. Read more on Markets by NDTV Profit.Macquarie removed, Ultratech Cement and NTPC. L&T was added for its strong order flows and LIC for its valuation support. Read MoreMarkets, Business, Notifications
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