The Midcap Index efficiency was resilient in 2021 regardless of Covid disruption with the index (+46%) outperforming Nifty (+24%). Doubtless home cyclical restoration and international liquidity might support midcaps in 2022, mentioned Jefferies in a notice on Monday.
The brokerage has beneficial a bottom-up method and its high inventory picks within the midcap house are Crompton with goal worth of ₹605, Dixon Applied sciences (goal worth: ₹6,450), Kajaria Ceramics (goal worth: 1,570) and Supreme Industries (goal worth: ₹3,130), for his or her robust model franchise, value management, premium launches and entrenched attain.
In 2022, the important thing focus themes may very well be housing upcycle – to profit constructing supplies, B2C resumption, formalization (Electricals, Pipes, Tiles), Indigenization push, PLIs (production-linked incentive schemes) and enter value pattern and worth hikes (market leaders to profit), as per Jefferies.
“In 2022, we foresee sturdy housing exercise in each city (tasks) and rural/semi-urban (unbiased housing). Regardless of escalating enter prices, customers should not deferring offtake a lot, as challenge completion timelines are sacrosanct,” the notice said.
Additionally, the federal government measures akin to sanitation, inexpensive housing, piped ingesting water to all by 2024 and rural electrification – may benefit constructing supplies (Kajaria, Supreme Ind, Astral Restricted) and electricals (Havells, Crompton, V-Guard, Finolex Industries).
In the course of the pandemic, unorganized gamers confronted a number of constraints eg: uncooked materials sourcing (sharp commodity spike), liquidity and dealing capital points, funding, weak stability sheet and so on. This might entail additional market share features by key organized leaders. (eg: Crompton, Havells, Supreme Industries, Kajaria).
Moreover, Jefferies believes key drivers for Indian EMS market may very well be aggressive prices, bigger OEMs outsourcing manufacturing to concentrate on branding, import restrictions and PLI schemes, from which it believes shares like Dixon Applied sciences and Amber Enterprises may benefit.
The views and proposals made above are these of particular person analysts or broking corporations, and never of Mint.
Supply: Live Mint