Exide Industries, Navin Fluorine International Top 2 Stocks to Buy

Hotter-than-expected inflation data on Wednesday dampened hopes that the Federal Reserve would begin cutting interest rates as early as June. With rising costs for gasoline and shelter, the US consumer price index too rose 0.4 percent last month. This put the year-on-year increase at 3.5 percent. Equity prices were further impacted by benchmark Treasury yields, which breached 4.5 percent to touch the highest level since November.

The yield on benchmark US 10-year notes rose 18 basis points to 4.546 percent, while the 30-year bond yield rose 12.8 basis points to 4.6273 percent. The ECB held rates steady on Thursday. Oil prices slid marginally after logging early gains as investors braced for a worsening of the West Asia crisis.

Brent crude prices were ruling at USD 90 per barrel. The dollar index, which measures the greenback’s value against six major currencies, was ruling over 105 after climbing to its highest level since November. The timing and extent of future interest rate cuts will play a pivotal role in shaping market momentum for the rest of the year.

Also read: Hindustan Zinc Share Price Falls After 21% YoY Decline in Q4 Profit

Meanwhile, the Asian Development Bank has increased India’s GDP growth forecast for FY25 to 7 percent from the earlier 6.7 percent and said that robust growth will be driven by the demand for public and private sector investment and the gradual improvement in consumer demand. However Rich valuations and geopolitical tensions worldwide, with expectations of an imminent Iranian attack on Israel, do not augur well for the market.

Overseas investors investing in India through Mauritius may have to face greater scrutiny after the amendment to the double taxation avoidance agreement between the two countries. Hence sentiment may turn negative hereon, the market direction in the near term will also be determined by the upcoming results season for the
March 2024 quarter (Q4 FY24), the outcome of the Lok Sabha elections, and the overall market valuation.

Hence investors should remain stock-specific and look for earnings visibility and reasonable valuations.

Here are the top 2 stocks which can fetch up to 14 percent return:

Exide Industries | Target: Rs 450 | Upside: 13%

Exide Industries announced a partnership with South Korean automotive giants Hyundai Motors and Kia Corporation for the localisation of EV (electric vehicle) battery production. Both Hyundai and Kia now import their EVs. However, they have plans to ramp up local manufacturing of EVs in the foreseeable future. This underscores the significance of their partnership with Exide Energy Solutions, a subsidiary of Exide Industries.

At present, the penetration of battery-driven electric vehicles (BEVs) in the PV segment stands at a mere 2 percent, largely because of factors such as high initial costs, insufficient charging infrastructure, and limited vehicle options. However, with the emphasis on green energy, this penetration is anticipated to surge. Exide, a dominant force in traditional battery supply, has been diligently investing in the Li-ion battery technology to cater to the growing EV sector. The recent partnership heralds a significant step towards localizing EV battery production.

Navin Fluorine International | Target: Rs 3765 | Upside: 14%

Navin Fluorine International specializes in fluorine chemistry and manufactures a range of products including refrigeration gases, inorganic fluorides, and specialty organofluorines. Its portfolio encompasses synthetic cryolite, fluorocarbon gases, hydrofluoric acid, and other fluorine chemicals. Additionally, the company provides contract research and manufacturing services. With manufacturing capacities for anhydrous and diluted hydrofluoric acid in India, the company serves various industries such as stainless steel, glass, oil and gas, abrasives, electronics, and life and crop sciences.

The company intends to invest Rs 288 crore in capital expenditures to establish a cGMP4 facility with a capacity of 200 KL in Dewas, split into two phases, to be funded by internal accruals. The first phase, with a capacity of 100 KL and an expenditure of Rs 160 crore, is expected to be operational by the end of CY25.

Moreover, the company’s emphasis on specialty chemicals, along with strategic capital expenditure in its traditional sector, is poised to fuel future revenue expansion.

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Research Analyst: Krishna Kumar Agarwal
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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.