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Business News/ Markets / Stock Markets/  Independence Day 2023: Tata Motors, Grasim among analysts' top 7 picks for next 1 year

Independence Day 2023: Tata Motors, Grasim among analysts' top 7 picks for next 1 year

Independence Day 2023: Market sentiment remains positive despite recent decline; analysts recommend buying select stocks with one-year horizon. Tata Motors, HDFC Bank, TCS, Hindustan Construction Company (HCC), Grasim Industries, DLF, and Voltas are their top picks for Independence Day 2023.

Since the last Independence Day, over the course of a year, Nifty gained by 9.8%. (iStock)Premium
Since the last Independence Day, over the course of a year, Nifty gained by 9.8%. (iStock)

Independence Day 2023: After the tumultuous low of the COVID-impacted year 2020, the market embarked on a resilient bullish trend, which has persisted without pause. The year 2022 witnessed some price corrections following two remarkable years, influenced by events like the Ukraine-Russia conflict and escalating interest rates. However, the year 2023 has rejuvenated market optimism, as prices venture once again into unexplored territory. Although a recent decline from higher levels occurred over the past week, the overall sentiment remains positive. Since the last Independence Day, over the course of a year, Nifty gained by 9.8%. On Monday trading session, Nifty 50 closed 6 points, or 0.03 per cent, up at 19,434.55.

According to Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One, in the immediate future, a robust support range is identified at 19,000 - 18,800. Any potential downward movement towards this range should be viewed as a favourable opportunity for purchasing. Conversely, the levels of 20,000 and 20,300 represent immediate resistance, while looking at a span of one year, a feasible target is around 21,000. As the market approaches an election year, historically characterised by bullish trends, and with the initiation of declining interest rates, the momentum of this rally is likely to receive additional fuel.

Also Read: Market Wrap: Sensex, Nifty end flat ahead of retail inflation data; mid, smallcaps underperform

On this Independence Day, analysts recommend investors to buy select stocks with a one-year horizon. Let's take a look at them; 

Top Fundamental Stocks

Sneha Poddar, AVP Research, Broking & Distribution of Motilal Oswal Financial Services Ltd recommends Tata Motors with price target of 750. According to Poddar, Tata Motors should witness a healthy recovery as supply-side issues ease (for JLR), along with a better mix, lower discounts and operating leverage (for all 3 businesses). It will benefit from: a) the commercial vehicles (CV) uptrend and stable growth in passenger vehicles (PVs), b) company-specific volume/margin drivers, and c) a sharp improvement in free cash flow (FCF) as well as a reduction in net debt in both JLR and the India businesses.

Second on the list is HDFC Bank with a price target of 2,070. Poddar believes that the merged entity is set to extend its lead as the second-largest bank in the country, with a market share of 16% in loans and 11% in deposits.

"The merger will enable the bank to create a more diversified franchise, with the mix of Retail loans improving to about 53% of total loans and the mortgage mix rising to 33%. We estimate the loan book to grow to 34.7t by FY26E with a nearly 17% compound annual growth rate (CAGR)," added Poddar.

According to Sneha, Tata Consultancy Services (TCS) remains cautious about near-term demand amid adverse macros, while it is quite optimistic about the secular long-term trend. Given its size, order book and exposure to long-duration orders and portfolio, it is well positioned to withstand the weakening macro environment and ride on the anticipated industry growth. Poddar recommends TCS with a price target of 3,790.

"We continue to expect TCS to deliver superior growth in the near term among our Tier 1 coverage on account of its leadership in cost efficiency, which has resulted in strong inflows for the last two quarters. We expect the trend to continue, providing better visibility for FY25 revenue growth despite an uncertain demand environment. We factor in a USD revenue CAGR of 10.7% over FY23-25E," said Poddar.

Top Technical Picks

Rajesh Bhosale of Angel One, recommends buying Hindustan Construction Company (HCC), Grasim Industries, and DLF Ltd.

According to Bhosale, Grasim Industries share price over the past year has demonstrated a modest performance. However, a more extensive analysis of the long-term monthly chart indicates a pattern of price oscillation within a defined range, hinting at the preparation for a substantial upward surge. This anticipated breakout has now been confirmed, manifested in a multi-month breakout pattern that bears semblance to a flag pattern on the monthly chart.

"Drawing parallels with the remarkable movement observed between 2020 and 2021, during which prices yielded returns of nearly fourfold from the low points within those years, we anticipate a similar impressive trajectory. Traders are advised to consider purchasing with a target set for the year at 2600. A safeguard against potential losses can be established with a stop loss set at 1650. As of the current update, the stock is valued at 1811," advised Bhosale.

Hindustan Construction Company (HCC), according to Bhosale in recent weeks, there has been a surge of interest surrounding this stock, attributed to its sustained closure above the 23 mark after a considerable span of years. This occurrence has validated a substantial breakthrough in the long-term perspective. The pattern being observed bears resemblance to a 'Cup and Handle' formation, and noteworthy trading volumes underscore the significant engagement of steadfast investors.

"While the broader market exhibits caution, the stock has delivered remarkable performance in the past week. This positive trend is anticipated to persist, given the inherent strength displayed by the stock. For potential investors, the current price hovers around 25.80, and the option to buy remains open. Additionally, considering downward price movements, an entry point around 24 is also viable. To mitigate risks, a prudent approach would be to set a stop loss below 20. A target of 43 within the upcoming year is clearly possible," added Bhosale.

According to Bhosale, DLF Ltd, with its remarkable performance over the past year, the stock has proven to be a traders delight. It has not only delivered an impressive run but has also stood out as a prominent performer within the Realty sector. Notably, the stock's prices have achieved a breakthrough from a long-term consolidation phase, spanning more than 13 years. This development is expected to inject robust momentum into the recent months.

"For potential investors, the current price stands at 470, presenting an opportunity for purchase. Additionally, strategic entry points around the breakout levels of 440 are feasible during price declines. To manage potential risks, a stop loss at 395 is advised. Looking ahead, a target of 640 is possible over the course of one year," said Bhosale.

Sumeet Bagadia, Executive Director at Choice Broking recommends Voltas as his Independence Day 2023 stock pick.

Bagadia has a buy call on Voltas at 820 and upto 800 for the target price of 905/ 934.

Bagadia claims that the stock has bounced back from a previous support zone on a monthly chart, indicating that the distribution phase is over. On the weekly chart, the stock's recent resistance level was 800, and it is currently trading above that level. Furthermore, the price is maintaining above the middle line of the Bollinger band, indicating the strength of the stock.

"The daily chart's RSI Indicator is trading near 60 levels, which suggests that the stock could inch higher in coming days. Additionally, the stock is up against a downward-sloping trend line resistance and may break out above 850 levels, which might push it towards 900 and above in coming weeks. So based on the above technical structure, we are recommending a buy position in the stock for the medium to long term," said Bagadia.

Also Read: Top gainers, losers today: Infosys, Reliance Industries, JSW Steel, State Bank of India; check full list here

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: 15 Aug 2023, 11:38 AM IST
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