Zomato, Paytm, RVNL, BPCL, HCL Tech and more: Top 7 Technical stock picks by StoxBox

StoxBox has released its "Techno Funda Super 7 picks" for August 2024, highlighting seven stocks that offer a blend of resilience and growth potential. These stocks have been selected based on expert market analysis, with the aim of delivering immediate gains and long-term value. 

Here’s a closer look at StoxBox’s top picks:

1. BPCL: BPCL, a key player in India’s oil and gas sector, has seen its stock surge 100 percent since October 2023. Currently in a consolidation phase, BPCL is showing signs of a bullish breakout. StoxBox recommends buying BPCL at ₹328, with a target of ₹357 and a stop loss of ₹317. 26.9%. Looking ahead, BPCL is set to invest ₹16,400 crores in FY25, focusing on refinery expansion, pipeline infrastructure, and increased retail outlets, which should help mitigate current challenges and support long-term growth, said the brokerage.

2. HCL Tech: HCL Tech is demonstrating robust relative performance with increased buyer demand, which is a positive. StoxBox suggests purchasing HCL Tech at ₹1,650, targeting ₹1,785, with a stop loss of ₹1,601. HCL Tech is likely to perform well in FY25 due to a higher non-discretionary portfolio, better deal conversions, healthy TCV, and a robust pipeline, noted the brokerage.

"We believe HCL Tech is well-placed from a long-term perspective, given its multiple long-term contracts with the world’s leading brands. Moreover, we believe that an encouraging demand environment will help eliminate uncertainty over discretionary spending," it added.

3. PAYTM: After a significant 80 percent drop from its listing week high, the pattern analysis of PAYTM indicates potential signs of the stock reaching a bottom. The recent upward movement has been accompanied by short phases of accumulation, further reinforcing the potential trend. StoxBox recommends buying Paytm at ₹555, with a target of ₹615 and a stop loss of ₹530 in the short term. Paytm's large and active user base of 7.8 million monthly transacting users supports a stable business model, enabling revenue from both consumers and merchants through cross-selling opportunities.

"We believe constant improvement in operating leverage will continue to drive its profitability. As we advance, we expect revenue and profitability to improve, driven by growth in operating parameters such as GMV, an expanding merchant base, recovery in loan distribution and continued focus on cost optimisation," noted the brokerage.

4. Petronet LNG: Petronet is well-positioned to capitalize on lower LNG prices and rising gas demand. StoxBox suggests buying Petronet at ₹366, targeting ₹401 with a stop loss of ₹351 in the short term. The stock also demonstrates high buyers' demand and an improving price strength relative to the market, further underlining its positive outlook. The company’s growth prospects are buoyed by favorable market conditions and strategic positioning, said the brokerage.

"As a leading player in India’s LNG import sector, Petronet LNG, backed by major public sector companies like ONGC, GAIL, IOCL, and BPCL, holds a 33 percent market share and manages approximately 75 percent of the country's LNG imports. The company operates two regasification terminals with a combined capacity of 22.5 MMTPA and is effectively expanding its facilities at competitive costs. These factors position Petronet LNG to capitalize on market trends and drive robust future growth," explained the brokerage.

5. Rail Vikas Nigam: Despite weak Q1FY25 results, RVNL, a leading name in the civil construction business, is expected to rebound due to its strong order book of ₹83,200 crore. StoxBox recommends buying RVNL at ₹565, targeting ₹626 with a stop loss of ₹538. The RVNL stock has exhibited a significant increase, more than doubling in value since reaching a low point in May 2024, prior to experiencing a period of mild profit booking, it noted. The company is optimistic about a revenue rebound in the remaining quarters, aiming for ₹17,700 crore, an 8 percent YoY increase.

6. TCS: TCS is forming a cup and handle pattern, showing strong momentum with RSI indicators handle pattern. Additionally, the stock demonstrates characteristics of a true market leader, which is a positive sign. The RSI across daily and higher timeframes is trading well above their medians without showing any divergence against the price, suggesting strong momentum in the price movement. StoxBox advises buying TCS at ₹4,375, with a target price of ₹4,705 and a stop loss of ₹4,241.

Despite short-term IT industry challenges, TCS’s focus on emerging technologies like cloud and AI positions it as a market leader, expected to drive growth and profitability in H2FY25. Considering its client profile, ability to win large deals, and strong demand pipeline, TCS will be a key beneficiary in a challenging environment, it stated. Additionally, TCS's focus on improvement in utilization, higher realization, automation, lower sub con cost and decelerating supply side pressure will drive margins.

7. Zomato: Zomato's price has been on a strong uptrend since hitting a low point in January 2023, completing a full-circle and indicating potential momentum in the ongoing price trend. • The stock has shown resilience to drawdowns below its shorter-term moving average, offering a low-risk, high-reward opportunity. Additionally, Zomato displays improving EPS, price strength, and strong buyer demand, which are all positive signs. StoxBox recommends buying Zomato at ₹262, with a target of ₹285 and a stop loss of ₹252.

The company is expanding its quick commerce segment, Blinkit, and investing in its B2B business, Hyperpure, with expectations of continued growth and improved margins. Moreover, the company exhibits strong optimism regarding growth prospects across food delivery and quick commerce segments, with strategic investments to enhance customer experience and service quality. They are navigating challenges focusing on maintaining profitability and expanding market share, noted the brokerage.

These seven stocks offer a compelling mix of short-term gains and long-term potential, making them ideal picks for investors looking to leverage growth opportunities in key sectors.

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.