Global brokerage house CLSA has replaced telecom major Bharti Airtel with ONGC in its India focus portfolio. As per the brokerage, ONGC is factoring in a crude price of only $50/bbl versus a spot of over $75/bbl. Using spot prices may drive over 115 percent upside in its stock price, it stated.

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In a previous note last month, the brokerage upgraded ONGC to 'buy' with a target at Rs 165 per share. It believed that using the crude spot rate would take the stock up to the fair value of Rs 260 per share.

It saw a 145 percent rise in formula-based domestic gas price in the next nine months and hence increased FY22-23 EPS for ONGC by 32 percent.

On the other hand, the upcoming launch of an affordable smartphone by competitor Reliance Jio in September 2021 may be a near-term overhang for Bharti, added CLSA.

However, the stock remains the top pick for the brokerage in the telecom space. Share gains for Bharti Airtel will likely continue as 4G penetration is at 56 percent of its 321 million subscribers, it said in an earlier note adding that Vodafone Idea is reeling under an enormous $24 billion debt.

The brokerage also noted that despite a seven percent rise in the Nifty in the April-June quarter, the quarter did not see a dominant investment style-based performance.

Metals, healthcare, PSUs, IT, power, oil & gas and capital goods were outperformers while autos, telecom, FMCG, banks and realty underperformed during the quarter. With nearly 60 percent of the Nifty members outperforming the index, there was no real dominant investing style during the quarter, observed the brokerage.

"After starting the quarter at neutral, India’s Bull-Bear Index ended at an elevated level even after cooling off from the extreme bullish levels of mid-Jun. Our India focus portfolio has outperformed the Nifty by 5ppt/20ppt during the quarter/YTD," it stated.

A further pick-up in vaccinations and the continued relaxation by states driving economic normalisation by end-2021 should keep investors optimistic, it added.

First Published:Jul 6, 2021 1:00 PM IST