Maruti Suzuki India Ltd (MSIL)
The brokerage has said “The stock has held above its 52 week’s EMA Since August 2020 and formed higher low suggesting inherent strength at elevated buying demand. We expect the stock to extend the current up move and head towards ₹9250 levels in the coming months as it is the measuring implication of four months range breakout ( ₹8300- 7200=1100) added to ₹8300. The weekly RSI recently generated a buy signal moving above its nine period’s average. Thus, it validates the positive bias."
ICICI Securities has also said that “The auto and auto ancillary space extended its outperformance as the Nifty Auto index is poised for a breakout above its multiyear highs since CY17. Within large cap auto, we remain positive on Maruti. The stock has remained resilient in recent market correction and witnessing breakout from four months consolidation signals resumption of upmove and fresh entry opportunity."
“In the long run, the company is well placed to capitalise on rising penetration of PVs in India accompanied by a rise in income levels. We build 14% volume CAGR, 17.7% revenue CAGR and 60.4% PAT CAGR for MSIL over FY22-24E. On the balance sheet front, MSIL is net debt free company with surplus cash amounting to ~ ₹40,000 crore as of FY22. On the core return ratios matrix i.e. RoIC, MSIL is a capital efficient player with RoIC>25% in normalised times. The company is also likely to benefit from recent appreciation of the rupee vs. JPY as well as recent correction in metal prices. At CMP the company currently trades at ~26x P/E on FY24E EPS of ₹321/share," said the research analysts Dharmesh Shah, Nitin Kunte, Ninad Tamhanekar, Pabitro Mukherjee and Vinayak Parmar of ICICI Securities.
Tata Power
As per ICICI Securities “Open interest in Tata Power has been reducing in the current leg of consolidation due to ongoing volatility. The open interest in July 2022 series is at a one year low. However, as the stock has low leverage, downsides look to be very limited. As the stocks has reached their important support levels, we feel fresh long position can be seen from here on. On the options front, the stock has the highest Call option base at 220 followed by 210 strike. Near the money Call strike of 210 and 215 in the stock has started to witness closure, which could offer much-needed momentum in the coming trading sessions. At the same time, the Put open interest base is firming up at the 200 Put strike from where the stock has seen a sharp reversal recently and is likely to act as strong support."
“The stock saw noteworthy delivery volumes at the lower trading range of trading band at ₹190-200 in October 2021 and December 2021. It revisited these levels in the June series but witnessed a sharp recovery. We believe these levels for the stock will act as major supports in the coming sessions. Volumes have again started increasing in the recent period near ₹200 levels, indicating fresh momentum for the stock. The stock has been finding support near its mean-2*sigma levels since it started the current uptrend in January 2021. Currently mean-2*sigma levels for the stock is placed near ₹196. We believe it will move towards ₹250 levels," said the brokerage in its note.
“Midcap and small cap stocks are witnessing recovery from their recent lows along with the Nifty. The Nifty may see some consolidation post a sharp down move in the last two series. However, apart from sectoral heavyweights, the select midcap space, especially Tata Power, has been witnessing delivery based buying interest at the support levels of ₹200. We expect Tata Power to continue its positive momentum on the back of fresh long additions," said the research analysts Nandish Patel, Raj Deepak Singh, Dipesh Dedhia and Siddhesh Jain of the broking company.
Torrent Pharma
The brokerage has said in a note that “The open interest in the stock was relatively subdued in the last six months. However, with the recent relative outperformance in the pharma space, the stock has seen a gradual build-up of open interest in the last couple of weeks with the recent price performance. However, 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. The stock witnessed noteworthy delivery based activity in May 2022 at the level of ₹~2800, which is a crucial support for the stock. Since accumulation was seen in this stock last month, we believe downsides are limited in it while positive momentum is likely to remain intact in the stock above ₹2800 levels."
According to ICICI Securities “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. From May 2020 to December 2021, the stock witnessed an impulsive up move from ₹2000 to ₹3200 levels. Since then, it has remained largely range bound with time and price based correction. This recent decline towards ₹2600 has given another opportunity to go long on the stock for fresh upsides."
“Broader markets seem to be moving into a consolidation phase after a sharp profit taking move was seen in the last few weeks. However, stock specific moves are likely to continue while the focus should be on stocks with low leverage positions. Torrent Pharma is one such stock, which seems to be moving out of the current consolidation and is likely to witness upsides in coming weeks," said the research analysts.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
