ICICI Securities is bullish on these quality stocks for good upside in 3 months
Premium- The shares of Suprajit Engineering, Bajaj Finance, and Hero MotoCorp have all received a buy call from the brokerage company ICICI Securities.
The shares of Suprajit Engineering, Bajaj Finance, and Hero MotoCorp have all received a buy call from the brokerage company ICICI Securities. The brokerage has set a target price of ₹388.00 and a buying range of ₹332-348 for the shares of Suprajit Engineering. A stop loss of ₹314.00 has also been set. The brokerage has set a target price of ₹6,470.00 for the shares of Bajaj Finance and a buying range of ₹5850-5940 with a stop loss of ₹5,490.00. ICICI Securities has set a target price for Hero MotoCorp of ₹3350 and a buying range of ₹2825–2865 with a stop loss of ₹2568. The brokerage has set a target period of three months for all of these stocks, and readers should be aware that all the recommendations were issued on July 12.
Suprajit Engineering
ICICI Securities has said, “The auto ancillary space has remained resilient over the past two months despite elevated volatility and is expected to outperform in coming months. We recommend Suprajit at the current juncture as it broke past a strong base formation at key long term 52-week moving average providing a favourable risk reward setup. The share price has formed identical bottoms in the vicinity of ₹300 making a strong base which has set the stage for the next leg of up move in coming months. Further, the move above ₹345 would accelerate the upward momentum."
The research analysts of the broking company have said that “Among momentum oscillators, weekly RSI has resolved above its nine period’s average indicating momentum returning in the stock. We expect the share price to head towards ₹390 in coming months as it is the implication of a breakout from 10 week base formation (345- 300) as projected from breakout level of ₹345."
Bajaj Finance
As per the research analysts of ICICI Securities, “The BFSI space has relatively outperformed the benchmark during the current pullback off June low. Within the space, Bajaj Finance looks lucrative at the current juncture. The stock has undergone strong base formation in the vicinity of 80% retracement of April-October 2021 rally ( ₹4362-8050) and is currently sustaining above 50 days EMA. This highlights rejuvenation of upward momentum that augurs well for extension of the ongoing up move."
“Structurally, the stock has witnessed slower pace of retracement as over past nine months it retraced ~80% of preceding five month’s rally ( ₹4362-8050). We expect the stock to resolve higher and eventually head towards ₹6470 in coming months as it is 50% retracement of April-June 2022 decline ( ₹7590-5220) coinciding with 200 days EMA. On the oscillator front, weekly RSI sustaining above its nine period average, highlighting strength that validates positive bias," stated the analysts.
“Its recent quarter performance was healthy on business growth front with AUM growth of 31% YoY. We believe since the fintech story is embedded in this business, valuations should stay at premium. The digital web platform, similar to app is the new strategy in FY23. Bajaj Finance’s core business has got potential and is well on track to get transformed into an adaptable new age fintech. Its digital transformation with robust customer additions to boost profitability factoring initial cashbacks as part of opex and no impact on profit," further added the analysts.
Hero MotoCorp
The research analysts Dipesh Dedhia, Siddhesh Jain, Nandish Patel and Raj Deepak Singh of ICICI Securities have said in a note that “The auto space has displayed strong resilience over the past two months compared to the Nifty. While the Nifty had made fresh 52-week low in June series, auto sector did not even breach its May low. Continuous buying was visible in auto stocks. As a result, Nifty Auto registered all-time high of 12300 surpassing highs of 2017. Among auto stocks, Hero MotoCorp remained a laggard. We expect the stock to overturn its underperformance and lead the next leg of the rally."
“The open interest in the stock was relatively subdued in the last six months. However, with the recent relative outperformance in the auto space, the stock has seen a gradual build-up of open interest in the last couple of weeks. Despite the recent price performance, there is ample room for a further increase in open interest. We believe fresh long additions may be seen, which should take the stock higher in the coming trading sessions," added the analysts.
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“On the option front, since the May series the stock had the highest Call base of 2800. Over the past few days the stock has managed to sustain comfortably above 2800. Hence, closure is being witnessed in that strike, which should keep the momentum on the positive side. On the Put side, 2700 followed by 2600 strike holds significant OI, which should act as strong support zone," said the research analysts.
They further claimed that “During the second half of February 2022 till the first week of March 2022 the stock witnessed aggressive selling pressure and corrected 25% from its high of 2872 to 52 week low of 2146. Since then the stock has recovered from lower levels on the back of strong delivery based buying. With the recent close above its resistance zone of 2850 we expect the stock to witness fresh buying interest. The Delivery Z score reading in the cash segment indicates there is still room for further delivery pick-up in coming days. In due course, an up move should pan out in the stock."
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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