Stocks to buy: Bajaj Consumer Care to ICICI Bank—SMC Global Securities lists four stocks to bet on this week

Stock market today: Domestic equity benchmarks Sensex and Nifty 50 saw solid buying on Tuesday, August 20, closing up by half a per cent, driven by mostly positive global cues. During the session, the frontline indices found firm footing, driven by robust buying in banking, financial and auto stocks.

The 30-share BSE Sensex rebounded 378.18 points or 0.47 per cent to settle at 80,802.86. During the day, the BSE benchmark soared 518.28 points or 0.64 per cent to 80,942.96. Rising for the fourth consecutive day, the NSE Nifty surged 126.20 points or 0.51 per cent to 24,698.85. 

The overall market capitalisation of the firms listed on the BSE rose to nearly ₹456.7 lakh crore from nearly ₹454.4 lakh crore in the previous session, making investors richer by over ₹2 lakh crore in a single session.

Also Read: Stock market today: Nifty 50, Sensex end higher; investors earn over ₹2 lakh crore in a day

US markets have rallied eight days in a row, recovering over $3 trillion of market cap from the August lows. Major markets across Asia and Europe climbed, bolstered by expectations that US Fed Chair Jerome Powell would provide clear signals on the potential size of a rate cut in September during the upcoming Jackson Hole Symposium this week.

In the current market scenario, domestic brokerage firm SMC Global Securities has released its top four stock picks for this week. The brokerage has selected the following stocks based on technical and fundamental parameters. According to the brokerage, the stocks have robust fundamentals and are well-placed to yield good returns for investors in the next one year.

Also Read: Jackson Hole: Will Fed Chair Jerome Powell signal rate cuts? How may it impact the Indian stock market? Experts weigh in
 

Weekly Stock Picks by SMC Global Securities

Let's take a look at the top four technical and fundamental stocks for this week by brokerage SMC Global Securities:
 

IPCA Laboratories: Current Market Price (CMP): ₹1,383.65; Target Price: ₹1,670, Upside: 25 per cent

Management expects the business to grow at around 14 per cent to 14.25 per cent for FY '25 and consolidate EBITDA to improve further to around 18 per cent for FY '25. The company is also working on cost-reduction strategies and operational efficiency improvements. 

In the API and export business, margin improvement is expected to stem from stabilising RM prices, with a projected annual margin improvement of 100-150 bps for the next three years to 25 per cent over the next seven years.

According to SMC Global, the company is doing well and expects EBITDA margins to remain stable at 18 per cent going forward. A healthy product mix and raw material cost optimization are likely to improve the company's financial position. 

Strong domestic formulation business growth, increased API space opportunities, and a strong geographical presence would support earnings. The brokerage expects the stock to see a price target of Rs. 1670 in 8 to 10 months on a target P/BVx of 6x and FY25 BVPS of Rs.278.39E.

Bajaj Consumer Care: CMP: ₹278.70; Target Price: ₹326, Upside: 19 per cent

In Q1FY25, Bajaj Gulabjal performed well in general trade after its phased sales launch in Q3 and Q4 of the last fiscal year. The brand further expanded its presence through B2B platforms such as Walmart, Nykaa, and Big Basket and independent stores across various regions.

The company`s implementation of Project Aarohan will positively impact its general trade business going forward. Organized trade and international business continue to scale up as per plans. Its strategic objectives of broadening channels and geographies are well on track. 

Its diversification journey continues with the scaling up of products under the Bajaj Brands in hair oils, growth, and planned expansion in the Almond Drop hair and skin care range. The brokerage expects the stock to see a price target of Rs. 326 in 8 to 10 months on target P/BV of 5x and FY25 BVPS of Rs.65.10.
 

Also Read: Week Ahead: FOMC minutes, macro data, Powell’s Jackson Hole speech, FII activity among key market triggers this week
 

ICICI Bank

The stock's 200-day Exponential Moving Average (DEMA) on the daily chart is currently at 1,095. The stock market reached its 52-week high of 1,257.80 in July, but since then, higher-level profit booking has kept prices under pressure. The stock can be seen retracing back towards 1,160 levels with the formation of a lower high pattern on the daily interval. 

However, the last stock took support and showed fresh bullish momentum again, with a breakout seen above the downward-sloping line of the declining channel. The positive divergence on secondary oscillators supports the breakout and points towards fresh, bullish price momentum. Therefore, one can buy the stock in the range of 1,180-1,185 levels for the upside target of 1,265- 1,270 levels with SL below 1,130 levels.

L&T Technology Services Ltd

The stock's 200-day Exponential Moving Average (DEMA) on the daily chart is currently at ₹4,883. Recently, the stock has experienced renewed momentum above its 200-day Exponential Moving Average (DEMA). Since then, it has been consolidating in a broader range of 4,800-5,200 levels, consistently staying above the 200 DEMA daily.

Technically, the stock has established a Triple Bottom pattern around the 4,800 level and has recently surged past the significant resistance level of 5,200. This upward movement is supported by a substantial increase in trading volume, suggesting the potential for further price gains. Therefore, one can buy the stock in the range of 5,200-5,210 levels for the upside target of 5,800- 5,850 levels with SL below 4,800 levels.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.