Sensex tops 60,000! Over 10 Omicron-proof stocks that investors can bet on: Experts

After closing with gains of over 22 per cent each as bulls pushed benchmark indices above crucial resistance levels in the first week of the New Year. The S&P BSE Sensex is back above 60,000 while the Nifty50 reclaimed 17900 levels.

Indian markets seem to be mimicking global markets but the rise in the Omicron variant of COVID in India might continue to pose a threat. Although experts feel that the recent spike could extend till Budget in anticipation of pro-growth policies from the government.

COVID cases in India have more than doubled from 22,000 daily cases as of 31 December to more than 58,000 as of 4 January, according to health ministry data.

A total of 2,135 cases of Omicron variant of coronavirus have been detected across 24 states and UTs so far, out of which 828 have recovered or migrated, according to the Union health ministry data update.

If the cases continue to rise, which most health experts predict could lead to a knee-jerk reaction especially in those sectors where restrictions are being placed by various state governments.

“It is interesting to see that US and European markets where the numbers of cases are highest are hitting their all-time highs and Indian markets are also rallying despite a sharp rise in covid cases,” Santosh Meena, Head of Research, Swastika Investmart Ltd, said.

“It is being believed that omicron could be the end of the pandemic because as per the recent data omicron is not as severe as delta variant and the hospitalization rate is not increasing however it is hurting economic activities due to restriction measures by various countries including India,” he said.

Meena further added that the market may continue to snub the rising covid cases with bullish momentum, and any small pullbacks will provide buying opportunities because the long-term texture of the market is very bullish.

Some experts are of the opinion that the market seems to have priced in a third wave; although, it might be too early to suggest that. However, inflow from foreign investors ahead of the budget could support the sentiment, suggest experts.

The vertical rise of more than 3 per cent in benchmark indices got some support from foreign institutional investors.

Foreign Institutional Investors which were net sellers in the last three months poured in more than Rs 2500 cr in the cash segment of Indian equity markets in the first three sessions of 2022.

“The pent-up consumer demand coupled with the disposable cash in India is at a record high. There will be cooling off effects in sectors like pharma but sectors like consumer goods, banking, and industrials will support the index,” Suman Bannerjee, Co-Founder & CIO, Hedonova – a US-based Hedge Fund, said.

“The market sell-off of the past few weeks had made stock prices more attractive and India is going to see an inflow of foreign capital looking to accumulate positions before the budget,” added Bannerjee.

Some caution should be there in the short term till full details emerge on omicron variant behaviour in a larger population, but at the same time, investors can look to increase their positions in Omicron safe stocks.

We have collated a list of stocks from various experts on stocks that are unlikely to get impacted by rise in COVID cases:

Expert: Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers

Some caution should be there in the short term till full details emerge on omicron variant behaviour in the larger population. Having said that, the larger economic landscape continues to remain positive for the long term.

Bharti Airtel Ltd

Bharti Airtel Limited (BHARTIARTL) has reported consolidated revenue of Rs.28326.4 cr in Q2-FY22 as against Rs.25060.40 cr in Q2-FY21, a growth of 13 per cent.

Recently, the company has also rebalanced the tariff of its mobile business and has undergone across the broad increase in plan prices by an average of about 20%.

Along with this, the company has also communicated its medium-to-long-term stance of growing mobile business ARPUs to Rs.200 initially and further to Rs.300 in due course which should be positive for the company.

We continue to believe that strong momentum in revenue backed by continued growth in customer additions and improved margins support the growth prospects for the company in long term.

Airtel’s strong brand presence coupled with its executional capabilities will help drive the top-line growth and healthy margins.

Ami Organics Ltd:

The company is the largest manufacturer and supplier of some of the Intermediates such as Trazodone, Dolutegravir, Entacapone, Nintedanib, Pazopanib, Apixaban with a market share as high as 90% in some products.

During the half-year results, the company has posted a growth of 51.1% in its consolidated revenues at Rs 235.40 cr.

Going ahead the company plans to increase its utilisation levels at its newly acquired facility and further plans to incrementally add capacities to aide growth through the launch of new products and increase in volumes in existing products.

Deepak Nitrite Ltd:

Deepak Nitrite has reported a growth of 70.3 per cent in its consolidated revenues at Rs.16,814 million in Q2-FY22 as against Rs.9,87.30 cr in Q2-FY21.

Going ahead, the management has also pursued to move higher up in the specialty chemicals value chain gradually driven by planned expansion initiatives across SBUs and tactical introduction of several downstream chemicals and complex chemical platforms.

The company also expects a deeper partnership between its strategic customers as significant volumes of its current and future products are supplied as part of long-term, formula-linked arrangements which augurs well in long term.

Indian Energy Exchange Ltd:

The company reported a good set of numbers for the quarter under review with revenue from operations increased by 55.6% year-on-year to Rs.1100 million on a consolidated basis.

During the quarter, electricity volume on the exchange grew by 57.6 per cent on a year-to-year basis and it was 25,976 MU.

The Real-Time Market remained one of the fastest-growing electricity market segments on the Exchange, achieving a growth of 125% YoY with 5.3 BU of volumes traded during the quarter.

Continuing its outstanding performance, RTM contributed 20 per cent to the overall volumes during the quarter. Furthering the customer-centric initiatives, IEX launched Value-Added Services (VAS) for the Renewable Energy generators.

The company is gearing to launch trade in Energy Saving Certificate, Green Day Ahead contract under the integrated Day-ahead market and also launch the longer duration delivery contracts in electricity and renewable segment.

Given the company’s leadership in the growing industry, favorable regulatory tailwinds, high operating margins and growth prospects.

Zensar Technologies Ltd:

Zensar Technologies Limited (ZENSARTECH) has reported consolidated revenue of Rs.1050.60 cr in Q2-FY22 as against Rs.979.40 cr in Q2-FY21.

The growth was underpinned by healthy performance in its consumer Services and Banking verticals, and momentum in its Europe and South Africa regions.

On a segment basis, Banking and Consumer Services were key drivers for the company during the quarter. The Banking segment grew 553% at $17.3 million YoY while the Consumer segment grew 25.1% at $21.8 million in the quarter.

Infosys Ltd:

In Q2FY22, the company delivered a strong quarter performance with YoY revenue growth increasing to 19.4 per cent and sequential growth accelerating to 6.3 per cent in constant currency.

Growth was broad-based across geographies and segments with the largest geography, North America growing at 23.1 per cent and the largest segment, Financial Services growing at 20.5 YoY in constant currency.

Revenue from the digital portfolio grew by 42.4 per cent YoY in constant currency terms. The company won 22 Large deals of over $50million, with TCV of $2.15 billion in Q2.

With a strong start to the financial year, good deal momentum in Q2, a robust pipeline, the company increased its annual revenue growth guidance from 14%-16 per cent previously to 16.5 per cent to 17.5 per cent growth in constant currency. Operating margin guidance remains the same, 22 per cent to 24 per cent.

Expert: Santosh Meena, Head of Research, Swastika Investmart Ltd

KPIT Technologies:

IT sector is the leader of this bull run where covid has acted as a key catalyst and I believe the IT sector may continue to do well where KPIT Technologies is one of our top picks from midcap IT space which is also a key beneficiary of EV theme.

Tech Mahindra:

Tech Mahindra is also looking strong from large-cap IT stocks and it is beneficiary of a turnaround in the telecom sector.

Hindustan Aeronautics Limited (HAL):

HAL is also looking attractive ahead of budget because we can expect some announcements for the defense sector. The stock is providing a favorable risk-reward opportunity around 200-DMA after a meaningful correction.  

Expert: Gaurav Garg, Head of Research, CapitalVia Global Research Limited.

Market’s direction will now be mainly determined by earnings of Q3 and the next big trigger is going to be the General Budget. Investors should look to accumulate good stocks which are fundamentally strong and are expected to deliver better earnings.

Reliance Industries Ltd:

Oil to Telecom might be a good defensive choice for investors as it has well-diversified business arms and JIO might be dark horse for earnings which are to be declared in January month.

TCS:

IT stocks are an evergreen choice and has a proven return record in Post Covid-19. TCS is likely to cross its All-time high and my preferred bet in the IT sector.

Expert: Ankit Pareek, Research Analyst at Choice Broking

Infosys:

IT service sector has been the big pandemic winner and will continue to witness traction, mainly on the back of increased spending by the enterprises on further improving and strengthening their IT infrastructure. We are positive on the stock considering the stellar performance and robust growth outlook.

Bharti Airtel:

Its domestic mobile business is expected to demonstrate its operational excellence in the sector. Moreover, its Airtel Business vertical, which offers a gamut of digital solutions to enterprises, could be the next growth engine for the company.

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