Top 2 stocks by Ashika Research which can return up to 19%

Indian benchmark indices, Sensex and Nifty hit lifetime highs for the second consecutive week. Positive sentiments were seen across global markets as investors bet on lower interest rates and a more accommodative monetary policy. The Federal Reserve, in its last meeting for 2023, maintained a dovish stance with unchanged interest rates for a third consecutive month. However it maintained dovish stance signalling at least 3 rate cuts in CY24.

Strong FII buying, the US 10-year Treasury yield dropping sharply to sub 4.0 percent levels, and the Dollar index declining to around 102 levels further aided the rally.

FIIs remained net buyers for the week to the tune of Rs 16,287 crore whereas DIIs turned net sellers to the amount of Rs 2,592 crore. The key domestic event last week was the October 2023 IIP (11.7 percent) and November 2023 CPI (5.6 percent) which came better than the expectations.

Going forward this week positive momentum is likely to continue with some consolidation might be on cards and corrections would short crisp rather than deep and prolonged.

As we approach the Christmas holiday season global activities might cool down. Hence stock specific activity is likely to continue, specific focus should be on rate sensitive sectors like Banks, Auto and Real Estate.

Stock Market Updates Today: Zee Entertainment, Lupin, Tata Power in Focus

China will announce the Loan Prime Rate for 1 year and 5 years on December 20, 2023 is another event to look after.

Here are the top 2 stocks which can return up to 19% upside:

Indian Metals & Ferro Alloys : CMP: Rs 517.50 | Target: Rs 615 | Upside: 18.8%

Indian Metal and Ferro Alloys is planning to ramp up ferro chrome capacity at Kalinganagar in Odisha by 1 lakh tonnes. Chrome ore mining and power plant capacities are also likely to increase in phases to support integrated production. Completion of Phase 1 of the capex is expected by May-June 2025.

Indian Metal has received the final compensation order from the nominated authority determining the valuation of free hold and lease hold land pertaining to Utkal C coal mines.

During Q2 FY24, volumes were higher while realisation remained flat QoQ which led to flattish revenues. With the incremental capacity of ferro chrome from FY26, volume growth is likely to come back.

L&T Technology Services| CMP: Rs 5263 | Target: Rs 5922 | Upside: 13.1%

L&T Technology Services reported strong Q2 FY24 performance led by broad based revenue growth and strong deal wins. Transportation & Plant Engineering led the growth. Europe & India regions were strong. The company won its first deal win of USD 10 million+ in the global markets leveraging SWC capabilities.

In other deals, the firm won six deals, each in excess of USD 15 million. Longer decision cycles and incremental headwinds from the macro-economic stress has led the management to turn cautious. It has also trimmed its revenue growth guidance to 17.5-18.5 percent for FY24.

The deal pipeline remains healthy despite signing three deals in Q3 FY24. The management is expecting more closures in the third quarter. NGC pipeline is strong with domestic and international deal closures nearing completion.

All three sub-segments, Auto, Trucks & Off Highway and Aero grew in the second quarter. To take advantage of Software Defined Vehicles (SDV), the company accelerated its training and capability building. Automobile sector is undergoing architectural transformation under SDV. It is building next gen chips and software through its partnership with US headquartered chip majors. Further, interest rate reversal in US will bring back the discretionary spend back on growth track. It will benefit the Indian IT companies.

_{Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment decisions.}