Exclusive: Nirmal Bang’s CEO Rahul Arora sees range-bound trade in H1 2022 – These stocks he picks for best returns

In an exclusive conversation with Zee Business Managing Editor Anil Singhvi, Nirmal Bang Institutional Equities chief executive officer Rahul Arora lists out the positive for the upcoming year 2022 and also mentions key levels for the Nifty50 as well as a few favourite shares from his bucket.

Pointing out that 16500 level is possible to bottom out for the index, Nirmal Bang CEO explains the market would see a range-bound trade of 1000-1500 points that is between 16500-18500 levels.

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He adds, that the market could see a swing between 16500-17000 on the downside and 18500-19000 at the upside in the first six months of 2022. According to experts, from April to July of 2022, the interest rates will start to be rising which is a risk to the market, Arora points out.

Besides, the tapering in the US markets and also rising interest rates at the global level will also impact the market in the coming year, moreover, the unlock theme is yet to play well, though it is expanding slowly and gradually provided a new dent does not come in the CEO mentions.

With respect to the new covid-19 variant — Omicron, Arora mentions, there is nothing to worry much about as the impact would be minimal and there is no threat from it.

On the back of unlock theme, the CEO of Nirmal Bang lists out Inox Leisure, Indian Hotels and ICICI Pru Life are likely to give bumper returns. He says, the first stock would do well because people have been flocking to theatres with major releases being scheduled for example Ranveer Singh starrer 83.

Besides, the improving occupancy and operation leverage being already in the place, the hotel industry to also do good in 2022. In this regard, Arora chooses Indian Hotels as favourite pick.

Third, in the list, ICICI Pru Life is already discounted at 30-35 per cent as compared to its peers from the sector and has the potential to grow further, the Nirmal Bang CEO mentions.

According to Arora, PE multiple of these stocks may see inflated now but within the next two-three quarters, the market will witness it being normalising going forward.

Similarly, in the auto segment, Nirmal Bang CEO says Ashok Leyland would do well and its EPS would jump to 2-2.5x as the commercial vehicle cycle is picking up. While, despite base effect reduction, tractors category companies such as Ashok Leyland and M&M would see a growth of 15-18 per cent. 

In the auto ancillary category, Jamna Auto also has huge potential as Tata Motors and Ashok Leyland are the two important companies from which the auto ancillary company gets its business. While the ROE and ROCE of the stocks is around 34-35 per cent”, the Nirmal Bang CEO explains.

Other stocks as a best bet from different sectors that Arora picks are HCL Tech and Tech Mahindra from IT space; Sundaram Finance and Shriram Transport Finance from Finance category.

While Ramco Cement, PNC Infra, and KNR Constructions are also the best bet Arora picked from the infra segment. Chemical companies such as Navin Fluorine and Sumitomo Chemicals; FMCG stocks such as HUL and Britannia are also the best bet according to Arora in the upcoming year 2022.