Buy, Sell, Hold: 1 stock and 2 sectors on analysts radar on December 29

The company is set to leverage on disruptive global auto industry trends and has evolved as a partner of choice for almost all original equipment manufacturers in the world," Motilal Oswal said.

Autos

Motilal Oswal said 2-wheeler demand remained mixed as the momentum gained from the wedding season in the northern belt is partially negated by muted sales in Rajasthan, Gujarat and Maharashtra. Hero MotoCorp witnessed strong demand for motorcycles during the recently concluded wedding season in north.

It prefers 4-wheelers over 2-wheelers & commercial vehicles due to strong volume growth & stable competitive environment.

Top picks in autos are Motherson Sumi, Bajaj Auto, Tata Motors & Amara Raja Batteries, Motilal Oswal said.

BFSI

Edelweiss said the research house perceived high probability of interest rates hardening given rising inflation expectations, likely fiscal slippage and higher-than-anticipated government borrowing programme.

Also, liquidity is normalising from excess and banks are now raising bulk deposit rates, it added.

The rise in interest rate, primarily goaded by macro factors rather than growth, will essentially entail earnings pressure and be negative for the BFSI sector, it feels.

According to the research house, the impact is likely to be higher on NBFCs (borrowing largely wholesale) as unwinding of funding cost benefit will pressurise NIMs. Operating profits, especially of PSU banks, are susceptible to the extent of 10-20 percent due to hit on investment portfolios, partially offset by lower pension cost. There are some earnings implications for private banks as well, albeit not significant, it said.

Within NBFCs, Edelweiss prefers niche players like Shriram Transport (will manage NIMs well). Equitas, being a small finance bank (SFB), will not be impacted much as it will see a shift towards deposits at relatively lower funding cost, it feels.