Synopsis: SMC Global Securities recommends four stock picks amid the rising market, advising investors to consider Kotak Mahindra Bank, Jyothi Labs, Escorts Kubota, and Mahindra & Mahindra. Each stock has been selected based on solid fundamentals or technical indicators, making them promising investment opportunities.
With benchmark indices reaching new record highs, SMC Global Securities has identified four promising stocks for investors to consider: 'Kotak Mahindra Bank', 'Jyothi Labs', 'Escorts Kubota', and 'Mahindra & Mahindra'.
In the current market environment where opportunities may seem limited, these stocks present good potential for returns.
Two of the picks, Kotak Mahindra Bank and Jyothi Labs, are backed by strong fundamental performance, while Escorts Kubota and Mahindra & Mahindra show robust technical momentum.
1. Kotak Mahindra Bank (Buy):
- Target Price: Rs. 2,237.
- Upside: 17%.
Kotak Mahindra Bank has shown stable asset quality and consistent growth in its loan books. As of June 2024, the bank maintained a GNPA ratio of 1.39% and an NNPA ratio of 0.35%. Its 'Net Interest Income (NII)' increased by 10% YoY, reaching Rs. 6,842 crore, although 'Net Interest Margins (NIMs)' moderated slightly to 5.02%. With a focus on expanding its unsecured retail loan portfolio and branch network, the bank is poised for future growth. SMC Global estimates that Kotak Mahindra's stock could reach Rs. 2,237 within the next 8-10 months.
2. Escorts Kubota (Buy):
- Target Price: Rs. 4,500-4,550
- Stop Loss: Rs. 3,700
Escorts Kubota recently bounced back after testing its support levels around Rs. 3,600, surpassing the Rs. 4,000 mark. Technically, the stock has shown strength, breaking out of an inverted head and shoulder pattern, indicating a fresh bullish momentum. On a broader chart, it has also surpassed a falling trend line, making it an attractive buy. The stock is expected to reach a price range of Rs. 4,500-4,550 in the coming months, with a stop loss set at Rs. 3,700.
3. Jyothi Labs (Buy):
- Target Price: Rs. 613.
- Upside: 14% .
Jyothi Labs stands out with a well-diversified portfolio, including categories such as dishwashing, fabric care, household insecticides, and personal care. Its strong product lineup, featuring brands like 'Ujala, Maxo, Exo, Pril, Margo,' and 'Henko', combined with cost-saving initiatives and innovations, make it a resilient choice. SMC Global highlights the company's robust distribution network and strong balance sheet as key factors driving growth. The stock is projected to hit Rs. 613 within the next 8-10 months.
4. Mahindra & Mahindra (Buy)
- Target Price: Rs. 3,200-3,250.
- Stop Loss: Rs. 2,700.
Mahindra & Mahindra has maintained a bullish trend despite recent consolidation between Rs. 2,600-2,900. The stock recently broke out from its consolidation, supported by rising trading volumes and holding well above its '200-day exponential moving average'. This suggests continued strength in the broader trend. Investors are advised to buy within the Rs. 2,900-2,950 range, with an upside target of Rs. 3,200-3,250, while maintaining a stop loss below Rs. 2,700.
In conclusion, SMC Global Securities has provided a balanced mix of fundamental and technical stock picks for investors to navigate the current market conditions.
Each stock offers a unique value proposition, whether through a strong business model, robust technical patterns, or a diversified product portfolio.
Investors looking to make informed choices amid limited market opportunities may find these recommendations to align with their risk tolerance and growth expectations.
Disclaimer: The information provided here is intended solely for informational purposes and should not be considered investment advice. It is recommended that readers consult with a financial professional before making any investment decisions.
