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Stock Ideas |
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Gladiator Stocks- |
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State Bank of India |
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Technical Outlook
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PSU banks have been under healthy consolidation since late November 2022 as they factored in peak interest rate cycle and fund raise. SBI, a leader of the pack is poised for breakout from key resistance offering fresh entry opportunity |
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Structurally, share price has undergone healthy price/time correction over past sux months wherein it formed a higher base in the vicinity of rising 200-dema |
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Fundamental Outlook
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The management provided credit growth guidance of ~12-16%, in-line with industry. Further, NIM are expected to remain steady without substantial dip anticipated owing to some headroom to increase MCLR further. Continued focus on retail segment with healthy traction in unsecured segment (Xpress credit), continued growth in housing loans and healthy pipeline in corporate segment is seen to aid business growth as well as maintain margins trajectory aheadIn just two sessions volumes have surpassed its 10-week average , a sign of buying support at higher levels |
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Strong liabilities franchise with focus on low cost deposit to aid support to margins trajectory. Anticipation of healthy recoveries in the coming quarter (to the tune of ₹ 3000-3500 crore) along with adequate provision buffer to aid earnings growth ahead. Management is comfortable on ECL provisions and adequate buffer to aid healthy earnings and, thus, RoA trajectory of >1% to continue ahead |
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HCL Technologies |
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Technical Outlook
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Large cap IT Stocks have seen base formation after strong correction over last one year. Within this space we remain constructive on HCL Technologies as it has relatively outperformed and given breakout from six months consolidation range ahead of earnings |
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Since significant price/time correction is behind us and many negatives have been factored in, we believe the stock offers favorable Risk reward at current juncture |
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Structurally stock has retraced 50% of last six quarters up move in seven quarters indicating slower pace of retracement signaling inherent strength and elevated buying demand |
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Among oscillators, weekly RSI in rising trajectory validates positive bias |
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Jamna Auto |
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Technical Outlook
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Auto index has been at forefront of the market rally since its June 2022 bottom. Index and many OEM and ancillary stocks are at 52-week highs indicating broad based nature of participation. Jamna Auto, which has been in a down trend since June 2022 peak, has posted a breakout above one-year declining trend line indicating a potential reversal with favourable risk-reward entry
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Structurally, share price of Jamna Auto has held key support zone of 95-100 over multiple occasions since December 2022, in the process factoring in all the possible negatives. In Tuesday’s session, stock price reversed from key support with significant volumes (highest weekly volumes since CY15) |
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Weekly MACD rebounded from its nine period average thus validates positive bias |
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Shriram Finance
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Technical Outlook
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NBFC’s have been outperforming segment within mid/small cap rally over past few months as many stocks are breaking out of multi year/quarter consolidations. Shriram Finance which is under consolidation phase for past five years, is coming out of hibernation and gave a breakout from triangular consolidation signalling emergence of new up trend |
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Structurally, share price has undergone a higher base over past five months above long term 52-week ema (currently at 1270) which has taken a shape of contracting triangle. Share price has factored in many headwinds including higher interest rates and now started making higher high-low on long term charts |
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In just two sessions volumes have surpassed its 10-week average , a sign of buying support at higher levels |
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Lemon Tree
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Technical Outlook
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Hospitality sector has been a key outperforming sector in CY22 as the stocks resolved out of multiyear underperformance underpinned by tourism picked up after two year Covid induced hiatus. Within the Hotel space we remain constructive on Lemon Tree as it is seen resuming up move after base formation above five months range breakout area (|89-73) coincided with 20 days EMA (placed at ₹ 93) signalling inherent strength and offers fresh entry opportunity |
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Key observation on the weekly chart of Lemon Tree is that, the entire up move of the last two years is well channelled thus providing incremental buying opportunity. During April 2023 stock has rebounded after forming strong base at the lower band of the channel highlighting sustained demand at elevated levels |
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Fundamental Outlook
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The company plans to add 738 rooms (669 rooms in Mumbai, 69 rooms in Shimla) over the next two years with total capex of ₹ 1006 crore. Post completion of expansion, LTHL will be operating ~11240 rooms in 122 hotels across India and abroad by FY25E |
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The management indicated that by CY28 the company plans to have 300+ hotels, 20000+ rooms network of which managed and franchised rooms would be more than 70%. We believe the company’s large asset base, strategic partnership and financial flexibility would continue to support the liquidity profile, if further need arises |
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Quant Pick - |
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Coromandel International |
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Derivatives & Quantitative Outlook
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As the Nifty is consolidating near life high around 18800, participation from broader markets is evident as both midcap and small cap indices have been outperforming the Nifty in the last couple of weeks. We believe there is further upsides in the select midcap stocks like Coromandel International which has shown significant resilience among its peers. We expect the stock to resume its fresh uptrend considering the pick-up in delivery volumes along with currently low leverage prevailing in the stock. |
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The major trigger is likely to come from the future segment where the open interest has declined substantially in the last couple of months despite a range bound to positive performance seen in the stock. The current open interest in the stock is significantly on the lower side and only marginal accumulation was seen in the last few sessions. We believe with fresh long additions, the stock should start performing from here onwards |
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*Last Traded Price |
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*Last Traded Price |
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