Do you you think IT stocks look interesting after the result season? What do you make of the recent surge in the IT pack?
I feel there is a lot more space there because some time back it went into a timewise consolidation which just got over. Businesses have been impacted due to Covid but the whole IT space has done very well. They have been regaining their businesses. They have been saving costs, especially on infrastructure. I think there is a lot of space for IT on the upside and I am really bullish.
Which are the stocks that you like at this stage?
has announced that Granules Pharmaceutical, its wholly-owned foreign subsidiary located at Virginia, USA, has cleared a pre-approved inspection for three applications filed in that facility. This is good news for the company. As it plays on the defensive side of the market, it is a good stock to have in your portfolio. On technical grounds, Granules India, after a long consolidation on weekly charts, has given a horizontal breakup. Volumes have also marginally increased. Both RSI and MACD are in favour and above 400. It will make a good up move. The target price level for Granules India will be Rs 450 and one should keep a stop loss at Rs 350.
The second one is a midcap steel company – Jindal Stainless. When I identified this stock, it was trading around Rs 134. Last week, we got to know that Tata Steel Mining and Jindal Stainless has signed an MoU. This is a win-win situation for both the companies. The company is set to announce their Q1 numbers on 26th July. As the company has been working continuously on reducing debt, it will surely benefit in the coming days. We saw a substantial growth in operating profit as well as in net profit in Q4. On technical grounds, the stock has given a flag pattern breakout on daily charts. And on the weekly charts, we can see a continuous ‘high top high bottom’ formation. Both RSI and MACD are showing extreme bullishness. The stop loss will be at Rs 120 and the target price will be Rs 175 for Jindal Stainless.
My third stock is Pitti Engineering Limited. It is a leading manufacturer of electrical steel lamination and is also the largest exporter of electrical steel lamination from India. In the fourth quarter, its revenue grew about 50% and EBITDA also grew around 50%. The management is expecting good growth in FY22. If there are no further supply side disruptions to the business, it will perform. I have a target of Rs 190 on the stock and a stop loss will be placed at Rs 135.
Do you think midcaps would continue to get rerated? Is this the space to be when there is some amount of economic recovery because the percentage gains could be much higher there?
Yes definitely. This is the space which will take the overall market on another level. At least for the next six to seven months, midcaps will be in focus and will be giving tremendous returns.