Polycab, Natco Pharma, Bikaji Foods & Gujarat Alkalies: 4 stock picks by SMC Global

Amid the rising selling pressure in the broader markets, domestic brokerage firm SMC Global Securities has suggested four stocks- Gujarat Alkalies & Chemicals Ltd, Polycab India Ltd, Natco Pharma Ltd and Bikaji Food International Ltd- to bet amid the limited opportunities to make money. The brokerage has picked the former two based on their solid technical parameters, while the latter two appear to be sound on the fundamental parameters. Here's what the brokerage has to say about these counters:

 

Gujarat Alkalies & Chemicals | Buy | Target Price: Rs 1,020-1,030 | Stop Loss: Rs 780

Fresh breakout has been observed into Gujarat Alkalies above the Inverted Head & Shoulder pattern seen on daily charts a few weeks back. However, the gains seem to be fizzling out thereon as once again stock slipped back towards Rs 780 level to take support at its 200 days exponential moving average on daily charts. Last week once again Bulls took control over the stock as the stock reached a 52-week high of 900 with strong bullish momentum seen from lower levels. Sudden spike in average volumes along with trend line breakout can push the prices further higher from hereon. Therefore, one can buy the stock in range of Rs 870-875 for the upside target of Rs 1,020-1,030 levels with stop loss below Rs 780 levels.
 

 

Natco Pharma | Buy | Target Price: Rs 1,687 | Upside Potential: 17%

Natco Pharma is engaged in the business of pharmaceuticals, which comprises research and development, manufacturing and selling of bulk drugs and finished dosage formulations of FDFs and APIs. APIs business is strategic and serves captive requirements and third-party sales The company has effectively established a local presence through its partners, ensuring sustained business growth. The management of the company plans to focus more on markets like Canada and Brazil, which offer robust growth opportunities going forward. The company continues to lay a good foundation for business growth in the Asia-Pacific region. Thus, it is expected that the stock will see a price target of Rs. 1687 in 8 to 10 months.

 

Polycab India | Buy | Target Price: Rs 8,500-8,550 | Stop Loss: Rs 6,800

Polycab has been consolidating in a broader range of Rs 6,400-7,400 from last four months with prices holding well above its 200 days exponential moving average on daily and weekly intervals. Last week a fresh breakout was observed into the stock after a series of prolonged consolidation with the stock marking its 52-week high of Rs 7,585.50 as well. The positive price action accompanied with volume activity suggests further upside into the stock. Therefore, one can buy the stock in range of Rs 7,400-7,450 for the upside target of Rs 8,500-8,550 levels with stop loss below Rs 6,800 levels

 

Bikaji Food International | Buy | Target Price: Rs 973 | Upside Potential: 15%

Bikaji Foods is the third largest ethnic snacks company in India with an international footprint, selling Indian snacks and sweets, and is among the fastest growing companies in the Indian organised snacks market. It plans to expand geographically and is eyeing exports and intends to keep up with double digit volume growth for the next 10 years. It has plans to open 2-3 QSR in FY25, and expects a big jump in exports. It is doing well and according to the management of the company; it has delivered a remarkable volume growth of 16.20 per cent during Q1FY25. On the bottom-line front, EBITDA margin improved too, which is led by reduction in commodity prices, superior mix, operating leverage and effective cost management. It is strengthening its distribution network to achieve a deeper distribution across its core and focus markets. Thus, it is expected that the stock will see a price target of Rs 973 in 8 to 10 months.