HDFC Securities is bullish on ITC, Tata Consumer Products and Dishman Carbogen Amcis. The domestic brokerage firm has added these stocks in its Fundamental Picks and advised investors to buy these stocks at the current market price and on dips for a time horizon of two quarters.

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ITC | TP: Rs 250

Against the backdrop of strong demographics, we believe that cigarette volumes will recover once the COVID-19 threat subsides, driven by improving consumer sentiment, recovery in rural consumption which forms 2/3rd volume share, improving standard of living, stable tax environment and curbing illicit trade.

Our thesis assumes that tax hikes will not be as steep as witnessed in the past five years. In this scenario, ITC can deliver mid to high single-digit volume growth. Additionally, the volumes have gradually recovered in H2FY21 and the company has gained market share.

Tata Consumer Products | TP: Rs 726

Tata Consumer Products being part of the Tata group is driven by established and experienced management, company has a long and established track record in the branded tea industry with the dominant market position in both the domestic and international marketplace, its established presence in other beverages segment across geographies with strong brand portfolio.

TCPL has low debt levels, healthy capital structure with comfortable liquidity for any inorganic growth plans.

Dishman Carbogen Amcis | TP: Rs 181

We estimate a 14 percent CAGR in revenue over FY21-23E, led by improvement in CRAMS India business and healthy growth in other segments. Post weak operating performance due to lower sales from CRAMS India in FY21, we believe operating margin would bounce back to ~23 percent level over the next two years, which would drive 44 percent CAGR in EBITDA for the same period.

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(Edited by : Ajay Vaishnav)