Global View: NMDC, Vodafone Idea, Sun Pharma and SBI Cards could give up to 50% return

The Indian markets are likely to trade higher on Wednesday tracking positive global cues. The Nifty50 is likely to surpass 18,100 levels.  

Domestic equity benchmarks on Tuesday, January 11, 2022, witnessed modest gains amid mixed global cues. The Sensex regained the 60,500-mark, while the Nifty finished above the 18,000-level.

We have collated a list of recommendations from various global brokerage firms according to a Zee Business TV report:

NMDC: Overweight| Target Rs 210

JPMorgan upgraded NMDC to overweight with a target price of Rs 210 that translates into an upside of over 50 per cent from Rs 136 recorded on 11th January.

The domestic iron ore prices have likely bottomed out. The stock is trading at an 8% dividend yield that offers an attractive risk-to-reward ratio.

The global investment bank believes that the domestic iron ore price cut cycle is broadly behind us and expects steel plant demerger should be a catalyst for the stock outperformance going forward.

Sun Pharma: Buy| Target Rs 1000

Citi maintained a buy rating on Sun Pharma with a target price of Rs 1,000 that translates into an upside of 20 per cent from Rs 832 recorded on 11th January.

The global investment bank expects the company’s global speciality sales to touch $970 million by FY24E (vs $470 million in 21), which would result in strong earnings growth.  

The dependence on the US generics has come down, while the generic pipeline has interesting assets and optionality value, said the note.

Also Read: Vodafone Idea approves conversion of spectrum interest, government dues into equity​

Vodafone Idea: Neutral| Target Rs 12.3

UBS maintained a Neutral rating on Vodafone Idea (VIL) with a target price of Rs 12.3 that translates into an upside of over 4 per cent from Rs 11.8 recorded on 11th January.

VIL opts for conversion of interest to equity which was not a surprise. The final amount is to be confirmed by DOT.  

While there are some downside risks but post equity conversion, Govt will be the largest shareholder as well as a creditor for VIL.

SBI Cards: Outperform| Target Rs 1230

Macquarie maintained an Outperform rating on SBI cards with a target price of Rs 1,230 that translates into an upside of nearly 39 per cent from Rs 885 recorded on 11th January.

The stock has given almost 15% underperformance when compared to Bank Nifty since RBI’s December announcement.
 
The current market price already factors in a 35-40bp regulatory cut in interchange fees, which reasonably factors in uncertainty on pricing.
 
The new-age cards and BNPLs are still less than 5% of the card spend.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)