The benchmark Nifty has surged over 4 percent in June, reaching around the 23,500 mark and setting multiple new highs along the way.
With high valuations for most stocks and no significant correction in sight, investors may find it challenging to determine where to invest. To address this, brokerage house BP Wealth has released 7 super picks for June. Let’s take a look.
Cummins India: The brokerage recommends ‘BUY CUMMINS’ between CMP- ₹3,680 for the target of ₹4,001 with a stop loss of ₹3,520 in the short term. The stock displays a strong uptrend. The price action ascended 135% followed by a 20% correction as profit-taking bouts. It witnessed a relatively stronger pullback from the support of 50 daily MA. The average line also offers immediate support. Meanwhile, the price action is trading in a potential cup and handle pattern indicating signs of trend continuation, explained the brokerage.
Fundamentally, the brokerage noted that Cummins India is poised for growth with its diverse portfolio, including diesel and alternative fuel engines. The company is preparing for upcoming emission norms and future technologies like battery packs, electric power generation, and hydrogen fuel cells. Anticipating a shift towards CPCB IV+ compliant products post-June 30, 2024, Cummins targets growth rates twice the GDP for FY24/25E, driven by robust domestic demand across sectors. Despite export challenges due to geopolitical tensions, a rebound is expected in FY25. The company’s efficiency measures and cost controls during the pandemic are set to improve margins as raw material price pressures ease, it said.
GAIL (India): BP Wealth recommends ‘BUY GAIL’ between CMP- ₹217 for the target of ₹236 with a stop loss of ₹209 in the short term. As per the brokerage the price action witnessed high volatility during the recently concluded Lok Sabha election leading to a failed breakout and a breakdown. As the price now heads towards the life highs, it indicates that committed buyers continue to showcase holding strength which is a positive sign. Further, the RSI across daily and higher timeframes are trading well above their median. This shows thrust in the price momentum, it added.
Fundamentally, the brokerage stated that GAIL is the market leader in natural gas transmission in India, with a pipeline network spanning 15,413 km and handling 206 MMSCMD. The company anticipates a gas transmission volume increase of 12 to 15 MMSCMD in the next two to three years, with 6,000 km of pipelines under construction. GAIL’s diversified revenue streams include city gas distribution, petrochemicals, liquid hydrocarbons, E&P, and telecom. In FY24, GAIL reported robust performance across major segments. The company plans a capex of Rs. 17,000 crores for FY2024-25, including significant investments in pipeline projects, petrochemicals, and net zero initiatives, it added.
Indian Railways Finance Corporation: The brokerage recommends ‘BUY IRFC’ from CMP- ₹173 for the target of ₹189 with a stop loss of ₹166 in the short term. The ongoing price action connotes the assumption that technical analysis of history repeats itself, noted BP. The stock is consolidating at the back of shorter-term moving average offering immediate support. It shows lower volatility diminishing the probability of an unruly move, it added.
Indian Railway Finance Corporation (IRFC) plays a pivotal role in funding Indian Railways’ capital expenditures, including rolling stock and infrastructure projects, with competitive borrowing costs and robust financial resources. The railways’ capex focuses on enhancing infrastructure, capacity, passenger experience, and safety. In FY25, the railways’ capital expenditure is budgeted at Rs. 2,52,000 crores. IRFC collaborates with other infrastructure lenders to finance projects within the railway ecosystem, benefiting from its highest credit rating among Indian issuers and maintaining strong asset quality with zero gross NPAs as of March 31, 2024, rationale the brokerage.
Info Edge (India): BP Wealth recommends ‘BUY NAUKRI’ at CMP- ₹6,200 for the target of ₹6,740 with a stop loss of ₹5,975 in the short term. The stock displays true market sectorial leadership characteristics compared to its peers and to its index itself, said the brokerage. The price action is observed to be taking periodic halts as a means of accumulation amidst the progressive uptrend. This indicates accumulation and inclusion of further smart hands in the stock, it noted. Also, it displays improving EPS and price strength and buyers’ demand, added BP.
Fundamentally, the brokerage noted that Info Edge (India) Ltd. (IEL) leverages a diversified portfolio including Recruitment Solutions, 99acres, and Jeevansathi, poised to capitalize on market trends. 99acres thrives on robust demand in resale, rental, and new home segments amidst favorable macroeconomic conditions. Info Edge integrates AI, data science, and generative AI to enhance user engagement and operational efficiency. Initiatives like Naukri 360 and Coding Ninja underscore their commitment to comprehensive career solutions. With innovations like IIM Jobs and Naukri Gulf driving growth, Info Edge is well-positioned for sustained expansion in diverse segments, it said.
NMDC: The brokerage recommends ‘BUY NMDC’ at CMP- ₹262 for the target of ₹287 with a stop loss of ₹252 in the short term. The price is currently trading at the conjecture of its 20 and 50 daily MA and 20 weekly MA and the previous breakout zone. This offers immediate and strong support. The RSI across daily and higher timeframes are trading well above their media indicating thrust in the price momentum. Though the EPS strength remains mediocre, it shows improving relative strength compared to the 50 index and sectorial strength, said BP.
NMDC plans to invest ₹1,500-2,000 crore in FY25 and aims for ₹50,000 crore over five years. Key projects include tripling pellet and beneficiation plant capacity. As India’s largest iron ore producer, NMDC’s robust operations are bolstered by reserves and long-term mining licenses. Recent price hikes are expected to boost average selling prices and earnings, supporting growth in production through FY25 and FY26, stated the brokerage.
Olectra Greentech: BP Recommends ‘BUY OLECTRA’ at CMP- ₹1,730 for the target of ₹1,925 with a stop loss of ₹1,660 in the short term. The price action is trading in a volatility contraction pattern while the diminishing contractions by time and price depth indicate accumulation of available supply. The fair value area bolsters a strong support limiting the drawdowns below the area. The stock shows improving relative and EPS strength, buyers’ demand, and strength within the sectorial group, noted BP.
As per the brokerage, Olectra’s leadership in the electric bus market is bolstered by a robust order book of 10,969 buses and a strategic partnership with BYD. The company’s extended collaboration with BYD enhances manufacturing capabilities, supporting efficient production and technology integration. Olectra’s focus on sustainable public transport solutions aligns with global trends toward cleaner transportation. With plans to expand manufacturing capacity to 5,000 buses, and potentially to 10,000, Olectra is well-positioned to capitalize on the growing demand for electric mobility solutions in India’s smart cities and under FAME-II initiatives, it stated.
Siemens: The brokerage recommends ‘BUY SIEMENS’ at CMP- ₹7,320 for the target of ₹8,040 with a stop loss of ₹7,045 in the short term. The stock displays a strong primary uptrend. Following the volatile move observed on general election day, it found modest support at the 50 daily MA that bolstered a pullback. Amidst the pullback rally the price managed to cross a pivotal resistance supported by volume and momentum. The stock thus offers a low risk and higher rewarding opportunity, observed the brokerage.
Fundamentally, the brokerage pointed out that Siemens Ltd. reported strong revenue growth and profitability in Q2CY24, with a 19% QoQ revenue increase and a 15% EBITDA margin. The company anticipates further growth from its energy business, which saw a 34% rise in new orders compared to the previous year. The board approved the demerger plan to spin off the energy business into Siemens Energy India Ltd. by CY25, aimed at enhancing market focus and operational efficiency. Siemens plans significant capex across its smart infrastructure and mobility verticals, including expansions in Goa and setting up a Metro train manufacturing facility in Aurangabad, it added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 17 Jun 2024, 04:08 PM IST