Top Stocks to Buy For Up To 14% Upside

Indian equity market ended last week on a muted note with benchmark indices Sensex and Nifty registering marginal gains of 0.2 percent each week on week. Nifty hit an all-time high level of 22,793.9 during the week.

Global stock markets moved higher after the US Federal Reserve provided interest rate guidance that was less hawkish than expected. This, combined with positive corporate earnings releases and economic data, boosted investor confidence. The number of Americans filing new claims for unemployment benefits held steady at lower levels last week.

The US Fed kept the benchmark interest rates unchanged but did acknowledge its disappointment over the “lack of further progress” in pushing inflation down to its 2 percent target. Following the announcement from the US Federal Reserve, expectations of an interest rate cut have been pushed back to November this year. With interest rates likely to stay higher for a longer period and bond yields remaining elevated, hence one might may continue to see foreign players on the sell side.

Indian manufacturing PMI for April 2024 stood at 58.8, down slightly from its 16-year high of 59.1 in March 2024. The index of eight core industries increased 5.2 percent YoY in March 2024 led by 10.6 percent/8.7 percent/8.0 percent YoY growth in production of Cement/ Coal/Electricity generation respectively.

This week, the Indian market will continue to focus on the earnings season while stock-specific action will continue. On the technical front, Nifty’s recent movement in a rising channel is marked by volatility. Price movements and technical indicators lack reliability on both sides – up and down swings in the channel. The VIX’s sharp rise from 9 to above 15 reflects heightened uncertainty.

Also read: Fed Rate Cut Hopes, Geopolitical Tensions Lift Gold Prices

Losing momentum and relative strength across sectors further highlights a fragile market.

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

Shree Cement Ltd | CMP: Rs 25,746 | Target: Rs 29,500 | Upside: 14.6%

Shree Cement has been consistent in capacity expansion (mostly through organic routes), with a capacity CAGR of around 12 percent over FY14-24. The company plans to increase its grinding capacity organically at a similar CAGR over the next three years. Most of these expansions will focus on its existing markets.

The company is one of the lowest-cost producers in the cement industry. Now, it is also focusing on improving brand equity by enhancing consumer pull for its
products in the market and increasing premium product share.

The company has also revamped its brand strategy and launched ‘Bangur’ as the master brand for all product categories across markets. This was implemented with a new brand identity through a new logo and modern packing designs. A new multi-media advertising campaign has been launched across television, outdoor, print, digital, and retail touchpoints.

Blue Dart Express Ltd | CMP: Rs 6821 | Target: Rs 7,750 | Upside: 13.6%

Blue Dart Express reported improved Q4 FY24 performance due to an increase in demand. The company has witnessed strong growth owing to heightened business activity from key industry verticals. With the addition of networks and capacities, the growth in volumes in picking up additional momentum.

As per the management, the company has introduced innovative shipping platforms and forged strategic partnerships to further enhance the operations. These efforts signify the company’s commitment to improving customer experience and strengthening its market position.

The company is optimistic about the opportunities that lie ahead and is focusing on offering expedited deliveries across the country.

Revenue during the quarter increased by 8.7 percent YoY, while EBITDA grew by 13.4 percent YoY. EBITDA margin during the quarter improved by 70 bps YoY at 17.1 percent. Net profit during the quarter grew by 12 percent YoY. The volumes have continued to grow with 9.5 percent growth in shipments and 4.4 percent growth in weights during FY24.

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.