RIL can touch Rs 3,000 in near term; add Vedanta at current levels: Mohit Nigam, Hem Securities

To recall, yields on 10-year government securities hit their 3-year high of 7.12 per cent, reflecting inflationary concerns and expectations of faster rate hikes by the RBI in the months ahead. US inflation hit a new four-decade high, made worse by Russia’s invasion of Ukraine. Back home, retail inflation in March hit 6.95 per cent, the first time since November 2020, and was way above the consensus expectation. With the spike in global commodity prices, continuing geopolitical uncertainties, pass-through of high input costs and hardening food prices, the outlook for inflation is uncertain.

What is your call on the market for the coming week? Any key levels that investors should watch out for in Nifty50 and Nifty Bank?
Investors will be paying close attention to the March quarter earnings, the Russia-Ukraine issue, rising inflation statistics, and crude prices.

Crude oil is still trading above $100 a barrel level. Any further oil price increase will be detrimental. Also, the market will turn its attention to the earnings season, which will be led by the IT and banking sectors. We expect a strong quarter for banks, thanks to a rebound in loan growth and a stronger balance sheet.

On the technical front, 17,050 would act as immediate support while the 18,000 level will be a resistance for the index. For Bank Nifty, 36,800 and 39,400 are support and resistance levels, respectively.

What is brewing in ? The stock has risen more than 30 per cent in the last 5 days. How should investors approach if they plan to put fresh money?
The Ministry of Defence (MoD) has notified the third positive indigenisation list comprising 101 weapons, systems, platforms and equipment. The list consists of over 100 items, including equipment and systems which are being developed and likely to translate into firm orders over the next five years. Orders worth more than Rs 2,10,000 crore are likely to be placed in the next five years.

Bharat Dynamics has an impressive possible order inflow count of nine, driven by long-range missiles.

The company can play an important role in achieving the Indian defence export target and investors who missed the rally in the last five days can wait for a dip and then consider Bharat Dynamics for investment purposes.

formed a Death Cross on charts on April 12, Trendlyne data showed. It is trading below crucial moving averages. Is it a value pick or should investors stay away?
Recently on the daily chart, the 50-day MA crossed the 200-day MA from above i.e. death cross crossover. Technically, death cross turnover is negative for the company and generally a stock witnesses some selling pressure after this crossover.

But on monthly and weekly charts, Kolte Patil is showing bullish momentum with lots of buying happening. Plus, all the moving averages show an uptrend. Daily chart death cross crossover can result in a temporary consolidation for some days but in the long-term, the stock is showing an uptrend only as long term charts i.e. Monthly & weekly are flashing a bullish momentum. Also, fundamentally the real estate sector will remain in bullish momentum for the coming months.

So, long-term investors should hold this stock.

Any particular sector that investors should track in the coming week? What is your call on the small & midcap space?
In the coming week, investors should keep an eye on the banking sector. We expect a good quarter for banks, with four giants expected to announce results in the next two weeks. Small and midcap space looks attractive as we believe any bounce back from current levels will benefit them more than the largecaps. Investors should look for companies that have good revenue growth, clean balance sheets and good revenue visibility.

As many as eight stocks from large and midcap space in the S&P BSE500 index are trading at all-time highs amid volatility. What should investors do – remain invested, book profits or buy any dip?

JSW Steel: The steelmaker has benefited from global commodity prices which are continuously increasing due to sanctions. Meanwhile, the company also took two hikes in product prices. We believe the commodity cycle will continue and JSW will benefit from that. We advise you to hold the stock.

Bharat Electronic and HAL: Both companies are continuously receiving orders from the government, following a significant amount allocation towards the defence sector. We believe we should hold the positions and buy these stocks on dips.

AU Bank: We are expecting a significant improvement in the banking sector result for the March quarter. We will see improvement in asset quality and CASA ratio for AU Bank and thus we should hold the position.


Varun Beverages: For upcoming quarterly results we expect volume to grow by 17.6%. The company has also updated on its entry into the non-beverage category, with new signings with PepsiCo for Kurkure Puffcorn. We believe we should hold the stock for an upside of up to 10% from the current level.


Poonawalla Fincorp: From a fundamental perspective, the stock looks overvalued as the ROE is -20 per cent and no significant growth in revenue is visible in the last few quarters. The stock is currently at a good level to exit.

Sheela Foam: It is a leading player in India’s mattress and foam products industry, currently trading at Rs 3,894 levels. It trading at an ROE of 20 per cent. Continuous sales growth is visible in the company it is expected to give a good quarter. We believe investors should hold their position.

In the fertiliser sector, we are expecting huge demand and to meet that demand the government might announce a subsidy to increase production. We should hold Deepak fertiliser and buy the stock on every dip.

What are your top 3-5 trading ideas for the coming 3-4 weeks?

Reliance: RIL is on the path to becoming a global leader with its futuristic ideas and strong execution in the New Energy space. Recent global acquisitions and alliances are evidence that it will achieve its goal of turning net carbon zero by 2035. Also, growth in its monthly ARPU, robust store addition trajectory continue to fuel revenue of the oil-to-telecom conglomerate. One can add the stock for the target of Rs 3,000 in the near term.

Camlin Fine Science: The company is the second-largest and lowest-cost producer of Hydroquinone and Catechol and is the third-largest producer of Vanillin in the world. The recent commercialization of the 10,000 mt Diphenol facility at Dahej, Gujarat has doubled CFS’ diphenol capacity and has enabled the company to strengthen and expand its downstream production. Investors can build fresh positions in the stock with price targets of Rs 165. The stock stood at Rs 138 apiece on Wednesday.

Laxmi Organics: This company is a leading manufacturer of Ethyl Acetate used in manufacturing of Paracetamol, with around 30 per cent share in the Indian market. The company is also a leader in diketene derivatives in India. In the last decade, its revenue increased by 7 times, Ebitda by 10 times and net worth by 12 times, depicting robust fundamentals of the company. One can buy the stock at current levels of Rs 445-447 for price targets of Rs 550.

Vedanta: The company is confident about increasing its zinc/Aluminium/Oil & gas business capacity. Further, the management has guided to reduce debt at the parent level and avoid inter-corporate deposits. Investors can add the stock at current levels of Rs 425 for a price target of Rs 500.

KPIT Technology: The firm is a digital transformation consulting and software integration company that provides cutting edge engineering solutions to more than 150 companies & enterprises in the field of CASE Mobility. The company works with top 10 out of 15 OEMs globally. We expect the stock to deliver good returns in the near future due to increasing share of its work in newer technology areas. We have a target of Rs 700 on the stock.

DISCLAIMER: Stocks mentioned in above answers can be part of HEM Securities PMS Fund. Hem Securities Ltd, its Associates, PMS, their Directors, employees, and their relatives may from time to time, have long/short positions and may buy or sell the securities of the above mentioned company(ies).


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