Infosys, LIC, JSW Steel, SBI shares: These 2023 largecap laggards may deliver big in 2024

A few largecap stocks, which failed to outshine Nifty50 in 2023 so far, may deliver healthy returns in 2024, said a few brokerages. Infosys Ltd, State Bank of India (SBI), HDFC Bank Ltd, Divis Laboratories Ltd, JSW Steel Ltd, Life Insurance Corporation of India and Reliance Industries Ltd (RIL) are a few stocks that look set to bounce back in the coming year, a few brokerages suggested based on fundamental or technical considerations.

Against a Sensex rise of 18.15 per cent in 2023, Infosys delivered a mere 1.25 per cent return; SBI gained 4.69 per cent, HDFC Bank 5.10 per cent, RIL 9.2 per cent, JSW Steel 12.87 per cent, Divis Laboratories 16.20 per cent and LIC 17 per cent during the same period.

Sunil Nyati, Managing Director at Swastika Investmart said there is a strong case for three stocks that did not rise much in 2023 and which could potentially recover significantly by 2024.

"My primary choice is the SBI, which, despite an exceptionally robust year in terms of earnings, has maintained a flat stock performance. Positioned as a proxy for India's growth narrative and currently trading below the price-to-book value of 2, SBI stands as an intriguing investment opportunity. I set a conservative target of Rs. 800 for SBI in 2024, reflecting an approximate 25 per cent increase from its present levels," he said.

"Divis Laboratories, which lagged behind both the Nifty and Nifty Pharma indexes is my second pick. Anticipating continued strength in the pharmaceutical sector due to favorable valuations and relatively low ownership, coupled with an optimistic view on overcoming margin challenges and US pricing pressure, I project a target of Rs 5,000 for Divis Labs," Nyati added.

Nyati also has JSW Steel as her stock pick. Expectations of rate cuts in the US and potential economic revival in China present a promising backdrop for a resurgence in the metals space. "With this in mind, my target for JSW Steel is set at Rs 1,100. These three stocks collectively represent my optimistic investment portfolio for 2024," Nyati said.

Deven Mehta, Equity Research Analyst at Choice Broking sees a favorable outlook for rate-sensitive sectors as both the US Fed and the RBI are seen implementing rate cuts.

"IT and banking sectors are poised to outperform. Wipro, a Nifty constituent, has exhibited robust technicals with a breakout above Rs 445, signaling potential for an upswing to Rs 560 level in 2024. HDFC Bank is projected to rebound after a subdued 2023 due to the HDFC and HDFC Bank merger. HDFC Bank could witness an move towards the Rs 2,000 level," Mehta said.

Shrikant Chouhan, Head- Equity Research at Kotak Securities likes Infosys. He said he was focusing on businesses, which have healthy growth characteristics, ability to cater to both discretionary spending and cost take-out programs and trade at reasonable valuations. Infosys, Chouhan said, meets the bill.

He expects Infosys' growth to normalise to 9.1 per cent in FY25 from a likely 2 per cent in FY24. Chouhan also likes SBI. He said the bank is growing its loan book a lot more cautiously, which gives greater comfort.

"The liability franchise remains impressive, which augurs well on credit costs. We feel valuations don’t reflect the strengths of this franchise. We should see the bank trading at higher levels as the quality of earnings would continue to surprise positively and could it be longer than expected," he said while suggesting a fair value of Rs 725 on the stock.

Chouhan said LIC shares have risen recently amid a rally in PSU finance stocks and hype around its new non-par product ‘Jeevan Utsav’. "Its IRRs are a tad lower than peers; a strong marketing pitch can improve volume growth and margins. Valuations remain inexpensive, providing big headroom," he said while suggesting a fair value of Rs 1,040 on the stock.

Based on technical charts, Rupak De, Senior Technical analyst at LKP Securities is positive on Reliance Industries (RIL). He said the stock has signaled a 'rounding bottom' breakout on the monthly chart, indicating a potential reversal from a downtrend. "Additionally, it has maintained continuous trading above a crucial long-term moving average," he said while suggesting a target of Rs 3,200 on the stock. The technical analyst said one can buy the stock in the Rs 2,580-2,610 and keep a stop loss at Rs 2,340.

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