These 2 stocks are HDFC Securities' top picks over next 2 quarters
Premium- The brokerage expects Indian Oil (IOC) to benefit from the ongoing recovery in the global refining cycle
Domestic brokerage and research firm HDFC Securities has recommended two top stock picks with a ‘Buy’ rating with time horizon of over two quarters, which are from Oil & Gas-Refining & Marketing and Auto Ancillaries sectors which are Indian Oil and LG Balakrishnan.
HDFC Securities' top stock picks over the next two quarters -
Indian Oil Corporation (IOC): The brokerage expect IOCL’s strong earnings momentum to sustain in the coming quarters, supported by multiple drivers like volume recovery, auto fuel price hikes, cyclical recovery in refining margins, recovery in petchem margins, and expected inventory gain as spot crude oil price are in the $95-100/bbl range.
“We expect IOCL to benefit from the ongoing recovery in the global refining cycle and expect marketing margins to return to normative levels following the completion of the state elections (with latest price hikes helping in this regard)," the note stated.
Investors can look to buy the stock in the Rs125-129 band and add more on dips to ₹114-118 band with base case scenario fair value of ₹140 and bull case fair value of ₹150 over the next 2 quarters, as recommended by HDFC Securities.
LG Balakrishnan & Bros: Due to its established presence in the transmission products for 2W in India, its replacement sales will keep growing given the large base of 2W and offset some concerns due to the imminent threat of EV in 2W that use minimal transmission products, the brokerage said.
“We believe investors can buy the stock in the band of ₹595-605 and add on dips to ₹525-535 band for a base case fair value of ₹672 and bull case fair value of ₹720 over the next 2 quarters,"
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The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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