Indian stock indices Sensex and Nifty 50 are trading lower on Wednesday as investors opt to book profits after the recent rally. Weak global market signals have also shaken confidence in domestic stocks.
The domestic market starts 2024 at a high level and therefore, according to analysts, it is difficult to expect the same performance by the end of 2024.
Dhiraj Relli, Managing Director and CEO, HDFC Securities said: “However, the rise of REIT acquisitions and issuances in India as an attractive market, albeit at seemingly high, which could help our market achieve further gains early in the year.”
He believes that going forward, we could see bouts of volatility due to elections, the timing and amount of interest rate cuts, and valuation concerns. Meanwhile, HDFC Securities’ retail research has come up with three fundamental stock picks that have decent upside potential over a period of two to three quarters.
The brokerage firm recommends buying Bharat Electronics, Caplin Point Laboratories and Spandana Sphoorty Financial at the current market price and also adding additional discounts.
Below are three basic stocks to buy from HDFC Securities.
Bharat Electronics | Buy | TP: ₹202
Bharat Electronics (BEL), one of India’s largest defense PSUs, is emerging as a major beneficiary of increased defense capital spending. Government ownership results in a large pipeline of nomination-based orders and significant defense payment requirements from foreign suppliers, creating opportunities for business growth over the medium term. HDFC Securities said: “BEL’s established track record, strong manufacturing capabilities, strong R&D base, solid order book with healthy order outlook and strong financial profile due to zero debt , attractive margins and improving profitability make us bullish on the stock.”
It looks like investors could buy the stock between ₹182-186 and add on dips to around ₹165-169 (26x Dec 25 EPS) with a base target of ₹202 (31.5x EPS December 25) and optimistic scenario. target is ₹218 (34x Dec 25 EPS) over the next three to four quarters.
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