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Sharing the changes to its midcap and largecap model portfolios, domestic brokerage house Kotak Securities said that it has added GMR Infrastructure to its midcap portfolio as international traffic has been quite muted and the brokerage expects this to pick up from 2HCY22.
GMR Group is a global infrastructure conglomerate with expertise in designing, building and operating Airports. It also has presence in areas of energy, transportation and urban infrastructure. The infra stock has surged over 78% in 2021 (year-to-date or YTD), whereas in a year’s period, GMR Infra shares have given around 82% return.
“We add GMR Infrastructure to the mid-cap. model portfolio as another reopening play. As discussed above, the omicron variant may not lead to significant disruption to the Indian economy and travel & tourism in the medium term even though it may result in reduced air passenger traffic in the next 2-3 months,” the brokerage note stated. Kotak Securities’ 12-month Fair Value for GMR Infra is ₹49.
The brokerage sees negative impact of omicron variant on both growth (lower given likely lockdowns) and inflation (higher from related supply disruptions).
Meanwhile, the broker has added Motherson Sumi to its largecap model portfolio. Motherson Sumi’s stock has fallen over the past one month on omicron-related concerns and over the past six months on continued chip shortages, which has dented global automobile production.
“We expect domestic and global automobile demand to pick up in CY2022 as the short-term omicron-related concerns and chip-shortage issues get resolved over the next few months,” Kotak Securities said.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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