Stock market today: Indian stock market benchmarks —Nifty 50 and Sensex—extended their losses into the third consecutive session on Tuesday, August 6, as investors remained cautious amid prevailing concerns over an economic slowdown in the US, geopolitical tensions in the Middle East, and the markets' rich valuations.
The frontline indices opened higher and traded in the green for most of the day, driven by a rebound in Japanese and other Asian stocks. They, however, failed to hold altitude and ended in the red due to profit booking during the last hour of trade.
The Sensex barometer faltered later and hit a low of 78,496.57 as banking shares came under selling pressure ahead of the Reserve Bank of India (RBI)'s policy decision on Thursday. Sensex and Nifty 50 have lost more than four per cent in the last three trading sessions over weak global cues.
Also Read: Bata India Q1 Results: Net profit rises 63% to ₹174 crore, revenue down 1.5% YoY; dividend declared
The Sensex ended the day at 78,593.07, a loss of 166 points, or 0.21 per cent. The Nifty 50 closed at 23,992.55, down 63 points, or 0.26 percent. The midcap and smallcap indices underperformed the benchmarks. The BSE Midcap index fell 0.71 per cent, while the Smallcap index ended 0.57 per cent lower.
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 time frame.
Let's take a look at the top four technical and fundamental stocks for this week by brokerage SMC Global Securities:
The company is extending the punched plate technology in batteries to 2W after successful implementation in 4W. It is setting the manufacturing process for making Absorbent Glass Mat (AGM) batteries, which have higher efficiency. Its R&D team is developing multiple solutions for future deployment of Battery energy storage systems (BESS). It reported 5.9 per cent YoY sales in Q1FY25, driven by volume growth across business verticals. EBITDA margin increased to 11.5 per cent in Q1FY25 compared to 10.6 per cent in Q1FY24.
The company is seeing positive demand in both automotive and industrial divisions and has achieved healthy growth in its key end-customer markets. According to the management, input cost inflationary pressures have started easing, which, coupled with its cost optimization initiatives, is expected to support margins. The brokerage expects the stock to see a price target of Rs. 624 in 8 to 10 months on target P/BV of 3.75x and FY25 BVPS of ₹166.29.
Management expects 8-10 per cent growth in the plywood segment and margins to improve by 50 to 75 basis points. During Q1 FY25, revenue jumped 35.67 per cent year on year (YoY) to ₹583.87 crore, and EBITDA soared to ₹58 crore from Rs29 crore posted in Q1 FY24.
The June quarter's EBITDA margin improved by 330 bps to 10 per cent from 6.7 per cent posted in the same quarter last year, supported by the MDF segment’s performance, operational efficiencies, and product mix.
According to the company's management, plywood business volumes grew by 8.6 per cent in the first quarter despite the negative impact of elections in Q1 FY25 and the MDF business. The company continued to focus on value-added products, and as a result, realisation per CBM (Cubic Meter) improved by 7.6 per cent compared to the previous quarter.
The company continues to focus on operating efficiencies and expanding its rural footprint. Due to its increased affordability, the country is a lucrative market for plywood. The brokerage expects the stock to see a price target of Rs. 440 in 8 to 10 months on current P/BVx of 6.53x and FY25 BVPS of Rs. 67.34.
The 200-day exponential moving average (DEMA) of the stock on the daily chart is currently at 157. The stock has been consolidating in a broader range of 130-190 for nearly six months, with prices holding well above its 200-day exponential moving average. Last week, a fresh breakout was observed in the stock above its key resistance level of 190 after a series of prolonged consolidation phases.
The stock also marked its 52-week high of 197.80 with rising momentum. Follow-up buying is expected after a breakout as positive divergences on secondary oscillators point towards a further up move. The brokerage suggests buying the stock in the range of 190-195 for the upside target of 228-230 levels with SL below 170.
The daily chart shows that the stock's 200-day exponential moving average (DEMA)is currently ₹533. After marking its 52-week low of 434.95 in March 2024, the stock steadily recovered and broke out above the Inverted Head and shoulder pattern on broader charts. The short-term chart shows that the stock has been consolidating in the range of 520-580 for the last month while forming a pattern of lower highs and bottoms.
Last week, a fresh breakout was observed in a stock above the declining channel. The sudden spike in volume activity suggests further upside in the stock. The brokerage suggests buying the stock in the range of 610-625 for the upside target of 700-715 levels with SL below 560 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.
