Power Grid, Chola Finance, Lemon Tree & Finolex Industries: 4 stocks SMC Global suggest to buy

Amid the rising volatility in the Indian equity markets, domestic brokerage firm SMC Global has shares four stocks- Lemon Tree Hotels Ltd, Finolex Industries Ltd, Power Grid Corporation of India Ltd and Cholamandalam Investment and Finance Company Ltd- to bet on. The brokerage has chosen the former two based on its sound fundamentals, while the latter two appears to be strong on the technical parameters. Here’s what the brokerage has to say about these counters:

Power Grid Corporation of India | Buy | Target Price: 345-350 | Stop Loss: Rs 290
Power Grid has been maintaining its bullish trajectory, with prices staying within an upward channel and consistently achieving higher highs on daily and weekly charts. In the last night, the stock has consolidated within the Rs 290-310 range after making its 52 week high of Rs 317.25. However, it recently broke out of a symmetrical triangle pattern on daily charts and gained a fresh upside momentum, as the stock has surpassed its key resistance level of Rs 312. This breakout indicates a probable continuation of the bullish trend. Therefore, one can buy the stock in the range of Rs 310-315 levels for the upside target of Rs 345-350 levels with stop loss below Rs 290 levels.

Finolex Industries | Buy | Target Price: 364 | Upside Potential: 24%
Finolex Industries is the third largest player in the PVC resin market and second largest manufacturer of PVC pipes in India. The company is the only backward integrated player, with in-house PVC resin capacity and 43 MW captive power, aiding cost control. It is doing well and has a strong balance sheet. According to the management of the company, different end-user applications, value-added products, a shift from metal to plastic pipes, ongoing consolidation and infrastructure demand will help the large plastic pipe manufacturers to post healthy double-digit volume growth. It is believed that large organized manufacturers with pan-India facilities will take advantage of this opportunity to increase market share over the coming years. Thus, it is expected that the stock will see a target price of Rs 364 in 8 to 10 months time frame.

Cholamandalam Investment and Finance Company | Buy | Target Price: 1,420-1,425 | Stop Loss: Rs 1,175
Chola Finance has staged an impressive recovery from its 52-week low in the last three months and has experienced a remarkable rally from Rs 1,000 levels to reach a 52 week high of Rs 1,352.60 in a short span. However, it recently underwent a correction phase over the past two weeks, retracing to around Rs 1,230 levels due to profit booking. Nevertheless, there has been a recent breakout above the symmetrical triangle pattern on the daily charts, indicating renewed momentum. With rising volumes and positive divergences on secondary oscillators, the stock is poised for further upside, potentially aiming for a new 52-week high. Therefore, one can buy the stock in the range of Rs 1265-1285 for the upside target of Rs 1,420-1,425 levels with stop loss below Rs 1,175 levels.

Lemon Tree Hotels | Buy | Target Price: 171 | Upside Potential: 17%
Lemon Tree has a portfolio of 155 hotels with 13,433 rooms; this includes over 100 operational hotels with 9,687 rooms and 55 hotels with 3,746 rooms, set to open in India and internationally. The company expects ebitda margins would cross 50 per cent going forward. Recent new launches and its plans to add more rooms and hotels in the next five years indicate future growth visibility. With no major capital expenditure plans in the near future, the company is now focusing on strengthening its balance sheet and starting next year, it would start reducing its debt. Thus, it is expected that the stock will see a target price of Rs. 171 in 8 to 10 months’ time frame.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.