Wipro, Thermax Top 2 Buys Which Can Give Up To 15% Return


by Sandip Das on 26 December 2023,  5 min read

Wipro, Thermax Top 2 Buys Which Can Give Up To 15% Return - MyDhanush Blogs by Ashika

Global and Indian stock markets ended lower in the week gone by after a strong year-end rally lost momentum on December 20, putting an end to a string of record finishes for the Dow Jones Industrial Average and that of Nifty.

Nifty crashed on December 20, falling steeply registering its the biggest One-Day fall in a year suggesting the possibility of a downward reversal. However later during the week it recouped some of its losses to end the week with a marginal decline of 0.58 percent. The market breadth too was weak as profit booking was seen across the board amid upcoming holidays and spike in Covid cases.

Mid and Smallcap indices also lost between 1.19 percent to 0.40 percent with unfavourable advance-decline ratio. However amidst all, FIIs continues to remain net buy during the month at Rs 26139 crore while DIIs also were net buyer of Rs 10109 crore in the cash market.

Key to note that December month has generally turned out to be positive month for Nifty. In the last 20 years the Index has ended in green for 15 such occasions. Hence it can be noted that the recent jerk in the market is a routine correction reacting to an overbought condition.

Going ahead with lower US 10-Year bond yield, Dollar Index, strong domestic economy data and robust inflows in 2023 will boost market sentiment in weeks to come.

Here are the 2 stocks which can give up to 15 percent return:

Wipro | CMP: Rs 462 | Target: Rs 530 | Upside: 14.7%

Wipro’s inorganic investments in building consulting capabilities have been instrumental in stimulating growth from key Business Units before the macro headwinds impaired its growth in H2 FY23. The company’s notable acquisitions strengthened its cross functional capabilities on both horizontal and vertical fronts.

The discretionary nature of spend has impacted its key verticals, BFSI and Consumer and consulting service lines. However, these segments are expected to regain their earlier growth trajectory once macroeconomic recovery takes place.

The company has demonstrated robust performance in its BFSI and Consumer verticals. It achieved around 10 percent CAGR each between FY18 and FY23.

Also Read: Infosys Slides After Global Client Terminates $1.5 bn Deal

The company’s investments in overhauling leadership team and restructuring management hierarchy are incentivizing in terms of improving TCVs. It continues to rationalize its employee pyramid mix with incremental fresher hiring. It is resulting in limited usage of subcontracting and trimming down average employee cost.

The company has further scope for margin improvement through pyramid rationalization, utilization, and offshoring.

Thermax | CMP: Rs 3142 | Target: Rs 3550 | Upside: 13%

Thermax is one of the few players with differentiated offerings in industrial products and processes like Heating & Cooling Solutions, THVAC, Boilers, etc. It offers a range of products and services across bio energy and renewable. It also has lined up plans to enter into coal gasification and electrical energy solutions including electric pumps.

Thermax is the only player in flexi-fuel boilers, thermal HVAC, TOESL offering. It has limited competition in bio-CNG, cooling solutions, coal gasification and chemicals.

The company is selectively approaching opportunities in international market and expect share of international projects to grow steadily.

Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment decisions.

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