The market has been in a tight range after correcting from its record high due to profit-booking on geopolitical tensions, disappointing earnings, Vishal Sikka’s sudden resignation as MD and CEO of Infosys and high valuations. Global markets also corrected recently after record highs.

Experts feel this consolidation is likely to continue in short term as the market has already priced in expected recovery in earnings from the second half of FY18 and normal monsoon.

Currently, they don’t see any major trigger either domestically or globally that may drive markets to new highs. So, the uptrend is likely only in September or October, they feel.

He feels the markets are fairly valued. “Definitely people are paying a lot of growth value in this market, but we are nowhere close to the bubble zone,” he said.

Here are SMC Global’s top five picks that may give 14-28% return in 8-10 months:-

Arvind | Rating – Buy | Target Rs 464 | Upside 27%

The company enjoys a global leadership position in textiles as well as carries an unmatched domestic portfolio of apparel brands and retail formats. Lower investments in brands and repositioning of unlimited, the management of the company expects the operating margin to improve in near term.

The company’s capability in manufacturing garments, coupled with its positioning of the most preferred franchisee/distribution partner in India, it is poised to benefit from an increase in demand for apparels. Thus it is expected that the stock will see a price target of Rs 464 in 8 to 10 months time-frame on three year average P/E of 22.50x and FY18 earnings of Rs 20.62.

Axis Bank | Rating – Buy | Target Rs 631 | Upside 28%

The bank is well positioned for future growth and is focusing on cross-selling to existing customers. This is a key driver for growth.

In FY18, the management expects the bank’s advances portfolio to grow around 5 percent faster than system growth. As has been the case in recent quarters, the retail advances business is likely to continue to remain the key engine of growth in FY18.

Thus, it is expected that the stock will see a price target of Rs 631 in 8 to 10 months time frame on a target P/BV of 2.7x and FY18 book value per share (BVPS) of Rs 233.83.

Larsen & Toubro | Rating – Buy | Target Rs 1,377 | Upside 22%

Larsen & Toubro is a major Indian multinational engaged in technology, engineering, construction, manufacturing and financial services, with global operations. It has a strong, customer–focused approach and sustain leadership over seven decades.

The company continues to focus on profitable execution of the large order book, selective order picking, on-time deliveries & operational excellence through digitalisation. The management is also emphasising on cost competitiveness, continuous optimisation of working capital, restructuring of its business portfolio and value creation with an aim to enhance its return on equity.

Implementation of GST is expected to have far reaching effects by bringing large parts of the informal economy into the formal system where compliance and accountability standards are of a higher order. Thus, it is expected that the stock will see a price target of Rs 1377 in 8 to 10 months time frame on a 2-year average P/Ex of 19.36x and FY18 EPS of Rs 71.11.

Bharat Electronics | Rating – Buy | Target Rs 213 | Upside 19%

Bharat Electronics is engaged in design, manufacturing and supply of electronics products/systems for the defence requirements, as well as for non-defence markets. The Government of India held 68.19 percent stake in the company as of June 30, 2017.

The robust order backlog along with a better execution environment provides healthy revenue visibility for the coming years. The government’s greater emphasis on ‘Make in India’ initiative in the defence sector provides a great opportunity for the company to enhance its indigenisation efforts and to address the opportunities in Indian defence sector.

Thus, it is expected that the stock will see a price target of Rs 213 in 8 to 10 months time frame on a target P/E of 29x and FY18 EPS of Rs 7.36.

ICICI Prudential Life Insurance | Rating – Buy | Target Rs 481 | Upside 14%

ICICI Prudential Life Insurance Company is the largest private sector life insurer in India. ICICI Prudential is a joint venture between ICICI Bank and Prudential Corporation Holdings, a part of the Prudential Group, an international financial services group. The company is one of the first private sector life insurance companies in India. It commenced operations in October 2000 and offers a range of life insurance, health insurance and pension products and services.

According to the management, which is focusing on improving protection business, persistency and costs, the company would get good growth in the coming years. The key strategy of the company has been to grow the value of new businesses through growing the protection business. It achieved its strategic goals for FY2017.

The company is well capitalised for growth opportunities. The solvency ratio was at a healthy level of 288.6 percent by the end June 2017, which is much above the regulatory requirement of 150 percent. Thus, it is expected that the stock will see a price target of Rs 481 in 8 to 10 months time frame on a one-year average P/Bvx of 9.38x and FY18 BVPS of Rs 51.29.

Source:moneycontrol.com