Kshitij Anand Moneycontrol News
The Nifty slipped below its crucial level of 9,100 on Wednesday tracking muted cues from global markets. The index was trading around its crucial support of 9,050 and investors who missed the rally which started in December 2016 will be eager to buy into select stocks.
“The markets are in strong hands and every dip is a buying opportunity. With strong support around 9,000 in Nifty, the downside seems capped from the current level,” Jayant Manglik, President, Retail Distribution, Religare Securities Ltd told moneycontrol.
“Participants should follow top to down approach in stock selection for better results. Among the sectoral pack, avoid pharma and telecom for short term trades,” he said.
Going by the buzz on D-Street, we have collated a list of five stocks from various brokerages which investors can look at buying on dips with a time horizon from 3-12 months:
Voltas: BUY| Target Rs 462| 12 months
HDFC Institutional Research in a note maintains its buy rating on Voltas with a 12-month target price of Rs 462 as the AC market is highly underpenetrated at 8.2 per cent, (especially when compared to discretionary categories like cars).
This provides multi-year growth prospects for Voltas (VOLT). While the market share in this category could vary each year, VOLT’s strong distribution, branding and attractive price points should enable it to maintain its leadership in a largely price-sensitive
market like India.
Jay Bharat Maruti (JBML): BUY| Target Rs 446-489| 2-3 quarters
HDFC Institutional Research in a note maintains a buy on dip approach on Jay Bharat Maruti for a target price of Rs 446-489, with a holding period of 9 months or 2-3 quarters.
Maruti Suzuki’s revamp plans to launch new cars across all categories in next three to four years could benefit JBML. Further, Suzuki’s plant coming up in Gujarat could also result in better visibility for MSIL.
We expect JBML could report decent revenue and”profitability growth over FY16-FY19. JBML will benefit due to the healthy outlook for the auto industry, as it translates into healthy demand from OEMs and replacement markets,” said the report.
ICICI Prudential Life Insurance: BUY| Target Rs 394-428| 6-8 quarters
HDFC Institutional Research in a note maintains its buy on dips approach with respect to ICICI Prudential Life Insurance company with a potential target price of Rs 394-428. The holding period specified by the research firm is 6-8 quarters.
ICICI Prudential has consistently generated the newest business premiums on a retail weighted received premium basis among all private sector life insurers in India for every year since fiscal 2002. Its market share increased from 5.9 percent in fiscal 2012 to 11.3 percent in fiscal 2016.
The growth rate of total premium written by the insurance industry has outpaced the GDP growth rate over the period of FY2002-FY2016. Going forward, the domestic research firm believes that the trend will continue and the insurance industry will have tremendous change and ICICI Pru is best places to auger benefits.
HCL Technologies: BUY| Target Rs 950| 12 months
ICICI Securities maintain a buy rating on HCL Technologies with a 12-month target price of Rs 950. The buyback programme which the company initiated was in line after TCS’ massive buyback of Rs 16,000 crore.
“We believe this may mount pressure on other tier-1 IT companies to follow suit to reward shareholders. Our back-of-the envelope calculation implies a marginal impact on FY18E EPS,” said the report.
ICICI Securities expects HCL to report revenue, PAT CAGR of 13.3%, 6.7% in FY15-18E with average 20.1% EBIT margins in FY17-18E led by order book conversion, IP-led revenue contribution and steady execution.
IDBI Bank: BUY| Target Rs 98| 6 months
ICICI Securities maintains a buy rating on IDBI Bank with a target price of Rs 98. The holding period of the stock is around 6 months based on technical parameters.
The share price of IDBI Bank has formed a higher high and higher low on the monthly scale and has recently registered a breakout past the major overhead trend line joining the multi-year highs thereby signalling a positive turnaround and provides fresh entry opportunity to ride the next up move going forward.
The stock is attractively poised and offers good entry opportunity from a medium term horizon. ICICI Securities expect the stock to resolve higher from here on and retrace 80 per cent of the of the entire decline from 2014 high of Rs 116 to 2016 low of Rs 48 there by projecting upside towards Rs 98 levels in the medium term.
(Views and recommendations given in this section are analysts’ own and do not represent those of Moneycontrol.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)
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