Paytm, Zomato and more: StoxBox lists top 7 stock picks to elevate your portfolio

In the fast-paced world of stock markets, making well-informed investment decisions can greatly improve your portfolio's performance. StoxBox, in its latest "Techno Funda" report, has revealed the top seven stocks for investment. This carefully curated list combines both technical and fundamental analysis to identify stocks with strong growth potential. Let's delve into the details of these promising investments.

HDFC Asset Management: The brokerage recommends buying the stock for a target price of ₹4,434 and a stop loss at ₹3,967 in the short term.

Technical View: The price movement of HDFC AMC has transitioned into a sideways trend subsequent to a significant surge of 155%. This suggests that committed investors are maintaining their positions, with further accumulation taking place. Currently, the price is encountering a key resistance level near 4,187, and both buyers and sellers are striving to reach a balance before a potential breakout. The stock exhibits strong EPS and improving relative strength compared to the 50 index and buyers’ demand.

Fundamental: StoxBox recommends buying this stock due to its potential benefits from new product offerings and market expansion. The company’s focus on increasing its market share and positive sector outlook makes it a solid investment. A changing market and positive sector outlook will boost AUM growth. The AMC sector benefits from increased public investor participation, growing financial savings, untapped mutual fund potential, investor awareness, robust distribution platforms, and digital convenience. The company's vast distribution network, including HDFC Bank, and strong brand identity benefit the company. Therefore, the company's AUM is expected to grow, driven by a higher share of equity-oriented segments, said the brokerage.

One 97 Communications (PAYTM): The brokerage recommends a buying Paytm at a target price of ₹449 and a stop loss of ₹398 in the short term.

Technical View: Following an 84% decline after the listing week, the stock had attempts at bottoming out. The following gaps observed between 31 January and 6 February 2024 indicate an exhaustion gap. The price action currently trades in an inverse head-and-shoulder pattern, which itself indicates a potential trend reversal. The price action is currently bolstered by its shorter-term EMA, offering a low risk and a higher rewarding opportunity to initiate a fresh long entry, said StoxBox.

Fundamental: As per the brokerage, the stock has shown potential trend reversal patterns, making it a compelling buy at current levels. Paytm's wide reach enables it to generate revenue from both merchants and consumers and allows for cross-selling opportunities. Moreover, Paytm expects to achieve breakeven in EBITDA FY25 and is well ahead of its guidance. However, due to temporary disruption in operating metrics, there will be an incremental EBITDA impact of ₹100 crore – ₹150 crore in Q1FY25. The company is confident of meaningful improvement from Q2FY25, as the company restarted certain paused products and started achieving steady growth in operating metrics. The brokerage believes constant improvement in operating leverage will continue to drive Paytm's profitability.

Power Finance Corporation: StoxBox recommends buying PFC at a target price of ₹572 and a stop loss at ₹506 in the short term.

Technical View: The price of PFC increased 492% from the lows in June 2022, after which it entered an accumulation phase. This indicates that committed investors continue to hold their holdings and add to their positions. The price reclaimed its polarity, followed by a pivotal resistance level with strong volume and momentum. Currently, the price is supported by the pivotal trendline, offering an excellent risk-to-reward ratio for a new entry.

Fundamental: The company's robust financial performance and strategic positioning in the power sector contribute to its attractiveness as an investment, said the brokerage. Power Finance Corporation (PFC) is well-positioned to benefit from India's growing clean energy sector, supported by government initiatives like RDSS and LPS. With over 30 years in the power sector and a focus on energy transition, PFC is set for sustained growth. In FY24, PFC achieved 14% loan asset growth, including a 25% rise in renewable energy investments, and maintained a 3.34% NPA level. PFC plans to continue expanding its loan book in power and infrastructure, anticipating similar growth next year, explained the brokerage.

Rural Electrification Corporation: StoxBox recommends buying the stock with a target price of ₹606 and a stop loss of ₹537.

Technical View: The price of REC experienced a rapid increase of 537% from the lows in June 2022, after which it entered an accumulation phase. This indicates that committed investors continue to hold their holdings and add to their positions. The price then reclaimed its polarity resistance level with strong volume and momentum. Currently, the same trendline supports the price, offering a good risk-to-reward ratio for a new entry.

Fundamental: REC is benefiting from favorable sector dynamics and strong financial health. The company’s continued growth and strategic initiatives make it a worthy addition to any investment portfolio, said the brokerage. Robust order book is set to boost revenue growth. The company expects to increase its renewable energy portfolio to about 30% by the end of 2030. Keeping in view such targets, last year, the company sanctioned renewable projects worth ₹1,36,000 crore. Also, in the current year, the company has a huge pipeline of projects amounting to more than ₹1,75,000 crore, informed StoxBox.

Siemens: StoxBox recommends buying the stock with a target price of ₹8,464 and a stop loss at ₹7,491.

Technical View: The stock displays a strong primary uptrend. Following the volatile move observed on general election day, it found modest support at the 50 daily MA that bolstered a pullback. Amidst the pullback rally the price managed to cross a pivotal resistance supported by volume and momentum. The stock thus offers a low risk and higher rewarding opportunity.

Fundamental: The company’s innovative solutions and market leadership position it well for continued growth, noted the brokerage. In Q2CY24, Siemens's business verticals exhibited strong revenue and profitability growth, ending the quarter with a 19% QoQ revenue increase and a 15% EBITDA margin. The company is also poised to benefit from new orders in its energy business. In addition to the capacity expansion of the power transformer factory in Kalwa and the vacuum interrupter factory in Goa, the company plans for more capex in its different verticals, further stated StoBox.

Sun TV Network: Stoxbox recommends buying the stock at a target price of ₹854 and a stop loss at ₹759.

Technical View: Sun TV's price action is currently trading in a volatility contraction pattern. The decreasing correction in both price depth and time at higher levels suggests potential absorption of supply. This is a classic indication of accumulation during an upward trend to strengthen momentum. The RSI on daily and higher timeframes is significantly above its medians, signaling the further potential for momentum in the price.

Fundamental: Despite a prolonged decline in ad revenues last year, the company anticipates recovery driven by improving rural spending and reduced inflation. Investments in OTT platforms are expected to contribute steady revenue. Industry trends such as sector consolidation and growth revival also support revenue growth. With FMCG spending improving, particularly in rural areas post-monsoon, there's optimism for increased ad revenue from heightened marketing expenditures, providing a stronger base for the company going forward, said the brokerage.

Zomato: StoxBoc recommends buying the stock at a target price of ₹225 and a stop loss of ₹197.

Technical View: After a significant increase of 364% from its all-time low, the price action has entered a consolidation phase, potentially gaining further bullish strength. This accumulation phase follows the breakout of a long IPO base. The stock shows improving EPS strength and buyer demand, as well as relatively strong price strength compared to the market. The daily and higher timeframe Relative Strength Index (RSI) is well above their median, indicating the potential for further momentum in the price.

Fundamental: As per the brokerage, the company's large user base and strategic initiatives in the food delivery sector enhance its investment appeal. Zomato Ltd reported robust FY24 results with adjusted revenue of ₹13,545 crore, a 56% YoY increase, and anticipates 40% growth in the coming years. Achieving positive EBITDA and PAT for the first time, the company targets a 4%-5% EBITDA margin while reinvesting for growth. GOV rose by 48% from FY23 to FY24, bolstered by demand recovery and gold program adoption in food delivery. Blinkit, Zomato's quick commerce arm, plans aggressive expansion, aiming to double store count and increase GOV by 4x. Hyperpure's B2B business expects strong, albeit slightly moderated growth as it scales, focusing on improving margins, noted StoxBox.

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.