After a strong rebound in the markets on back in July and August, markets have been volatile in the month of September. Overall, on a month-to-date basis, the benchmark Nifty has been flat, up 0.2 percent in the current month. Decent June quarter earnings and FII flows turning positive for the first time in July since October 2021 were some key positive trends that helped the market recover in recent times. Further, the recovery in demand and moderation in raw material prices have also lifted the sentiment.
Going ahead, domestic brokerage house Prabhudas Lilladher stated that the festival demand from the urban middle class is expected to remain strong, which will enable good Q2 and Q3 will show benefits of correction in commodities. It suggests accumulating fundamentally strong companies with business moats in uncertain times. The brokerage said that it remains overweight on Auto, Banks, IT services, capital Goods and Healthcare and underweight on Metals, Cement, Consumer, Oil and Gas and NBFC.
The brokerage has come out with four technical picks for the medium term (3-6 month horizon). Let's take a look:
BUY | Target: ₹880 | Stop Loss: ₹770
"The stock has been in a trending mode and now has made a higher bottom formation pattern in the daily chart and is poised to rise further upward. The indicators have been favorable and looks attractive for an up move in the coming days. With also good volume participation supporting our positive bias, we recommend a buy in this stock for an upside target of ₹880 of keeping a stop loss of ₹770," the brokerage said. It sees a 9 percent upside in the stock in the medium term.
The stock has fallen 6 percent in the last 1 year but is up 8 percent YTD. The stock has given muted but negative returns in September (MTD) as well as August after a 15 percent jump in July.
In the June quarter, the firm reported a 38 percent jump in consolidated profit after tax (PAT) at ₹255 crore, up from ₹185.2 crore in the year-ago period. On a sequential basis, the profit increased 17.5 percent from ₹217.5 crore in the January–March period. Its consolidated revenue rose 10.6 percent to ₹3,327 crore from ₹3,009 crore in the same period of the previous year. Sequentially, revenue was up 4.8 percent.
“We delivered double-digit revenue growth and improved profitability for the company despite a challenging macro environment and inflation impact in some of our categories," Managing Director and CEO Sunil D'Souza said post the earnings.
BUY | Target: ₹4,130 | Stop Loss: ₹3,640
"The stock after the short correction has bottomed out near the significant 200DMA and trend line support of the ascending channel pattern on the daily chart and has indicated a decent pullback with improved bias. The RSI is also well placed on the rise and has indicated a trend reversal from the oversold zone with immense upside potential to carry on the momentum still further. We suggest buying and accumulating this stock for an upside target of ₹4,130 keeping the stop loss of ₹3,640," explained the brokerage. It sees an upside of 9.5 percent in the scrip in the medium term.
The stock has remained flat, down just 0.4 percent in the last 1 year, but is up 15 percent YTD. The stock has given lost 8 percent in September (MTD) after around a 10 percent jump in August and July.
In the June quarter, the auto major clocked a 10.6 percent year-on-year growth in standalone profit at ₹1,173.3 crore supported by strong operating profit and price hikes. Profit for the June 2021 quarter was ₹1,061.2 crore. Its standalone revenue for the quarter came in at ₹8,005 crore, up 8.4 percent from the year-ago quarter led by pricing and mix. However, its sales volume declined 7.2 percent YoY.
Bajaj Auto has sold more than 9.33 lakh units during the April-June period of this year, against 10.06 lakh units sold in the same period last year, with two-wheeler volumes falling 6 percent and commercial vehicle segment volumes down 19 percent YoY.
"Sales in the quarter were significantly constrained by the inadequate availability of semi-conductors, although the situation improved in the latter part as new supply sources were developed," the company said.
BUY | Target: ₹350 | Stop Loss: ₹280
"The stock has corrected from the level of ₹503 to consolidate at around 250 levels and with the positive candle pattern formed, the stock looks potentially poised for an upside bounce. The RSI indicator is positive, we recommend a buy in this stock for an upside target of ₹380 keeping a stop loss of ₹280," advised the brokerage. It sees a potential upside of around 20 percent in the stock in the medium term.
The scrip has lost over 25 percent in the last 1 year and 10 percent in 2022 YTD. However, the stock has recovered in the current month, rising 9 percent on an MTD basis after a 6 percent fall in August.
June quarter was a weak one for the firm, its consolidated profit after tax declined by 56 percent to ₹17.6 crore during Q1 FY23 compared with ₹39.7 crore during Q1 FY22. Meanwhile, its revenue from operations on a consolidated basis also decreased to ₹121.1 crore in the Q1 FY23 from ₹137 crore in the Q1 FY22, down 12 percent YoY and 8 percent QoQ. Consolidated EBITDA during Q1 FY23 came in at ₹30.9 crore as against ₹62.7 crore during Q1 FY22, down 51 percent.
In its outlook, Advanced Enzymes said it will continue to focus on all three divisions - human nutrition, animal nutrition and bio-processing including developing, adding and launching more products in the target market of probiotics. The company is confident that its existing capacities and capital investments would serve well to expand its enzymes and probiotics business.
BUY | Target: ₹1,400 | Stop Loss: ₹1,160
"The stock overall has recently indicated a breakout above 1100 zone and currently with a short correction has formed a higher bottom pattern on the daily chart and reversing with a positive candlestick formation to improve the bias and anticipating for a further rise in the coming days. The RSI indicator again has improved with a trend reversal seen and is well placed with immense upside potential witnessed. We recommend a buy in this stock for an upside target of ₹1,400 keeping a stop loss of ₹1,160," suggested the brokerage.
The scrip has lost 13 percent in the last 1 year and 17 percent in 2022 YTD, however, it has been giving positive returns since July. It has added over 14 percent each in July as well as August and is up 1 percent in September so far.
In the June quarter, the firm announced an 83.6 percent YoY rise in net profit to ₹544 crore from ₹296 crore in Q1 FY22. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) stood at ₹1,077 crore, a rise of 9.2 percent from the same period last year. Consolidated revenue climbed 5.1 percent YoY to ₹4,311 crore. The company reported consolidated revenue of ₹4,311 crore in Q1 FY23, an increase of 5.1 percent YoY.
AS Lakshminarayanan, MD and CEO, Tata Communications, said, “We delivered a profitable data revenue growth as a result of disciplined execution, portfolio enhancements and deeper customer engagements. We continue to closely monitor and overcome the OEM and Supply Chain challenges. We are pleased with the healthy growth in the order booking and funnel additions across our portfolio, both in India and international markets.”