10 PSU Stocks Have Potential For 16-31% Upside In 6 Months; Coal India, GAIL, HUDCO In List: Do You Own?

As India lays the foundation for Amrit Kaal on the 77th Independence Day, brokerage LKP Securities has picked the top power-packed PSU stocks to buy. These stocks are from diverse sectors such as defence, BFSI, engineering, logistics, coal, oil & gas, metal, and electrical equipment among others. These stocks are expected to rise in the range of 16% to as high as 31%.

LKP Securities expects a 16-31% rise in these ten PSU stocks. The brokerage has recommended buying into them. It has set a time duration of 3-6 months for these stocks to achieve the target prices.

Here is the list of 10 PSU stocks which are LKP's top picks:

1. Bharat Electronics (Buy In Range Of Rs 120 - 130 For Target Price Of Rs 146/157):

This defence PSU is seen to end FY24 with a mammoth order book of over Rs 600 billion even as the management has guided for an order inflow of Rs 200 billion this fiscal. Given its track record of execution, robust order accretion and sheer width of its product range positions BEL strongly in the Defence sector this fiscal.

As per the brokerage, the stock has experienced a breakout from a bullish flag formation on the weekly chart. This breakout pattern suggests the potential for further upward movement. It added, "A robust uptrend is evident in the stock's price action, characterized by consistent higher highs and higher lows, indicating sustained positive momentum."

The stock is seen to rise by 21% ahead.

2. Bharat Heavy Electricals (Buy In Range Of Rs 95 - 100 For Target Price of Rs 118/125):

According to LKP Securities, this PSU probably has the distinction of having the most SELL reports from Brokerages as Analysts are not enthused at the miss on estimates quarter after quarter. Also, its 4-year high Order Inflow fails to cheer Analysts since it is buoyed by the Rs 96bn maintenance order for the 80 Vande Bharat Trainsets.

However, the brokerage highlighted that it is the transition towards the Industrial segment and likely monetization of its real estate assets seems to keep the street happy as seen in the recent meteoric rise in stock price.

A potential upside of 25% is seen in this PSU stock, as the stock is undergoing a rounding bottom formation, which often signifies a potential reversal from a downtrend to an uptrend. The brokerage added, "A rising trendline provides essential support to the stock's price movements, suggesting an increasing bullish sentiment. Immediate resistance is at 108." Thereby, the brokerage believes that a successful breach above this level could pave the way for further upward movement with potential targets at 118 and 125.

3. Coal India (BUY In Range Of Rs 225 - 235 For Target Price of Rs 255/272):

Despite heavy rains at some of its mines, this largest coal producer reported its highest production in the first quarter of FY24. Also, the company's despatches to the non-power sector were the highest. Not to forget, the Rs 1400 billion PSU Giant trades at inexpensive valuations and also has a compelling dividend yield of 8%.

The stock is on the brink of a significant breakout from a falling trendline, indicating a potential shift from bearish to bullish. LKP added, "Immediate resistance is present at 245. Successfully surpassing this level could lead to an acceleration of positive momentum in the stock's price."

The momentum indicator, RSI, is entering the territory above 60, affirming a bullish bias and suggesting increasing positive momentum.

Coal India shares have a potential upside of 16%.

4. Cochin Shipyard (BUY In Range Of Rs 590 - 610 For Target Price of Rs 680/710):

The company is expected to see good momentum this fiscal on the back of its strong Rs 210 billion Order Book.

As per the brokerage, the stock is maintaining a strong uptrend marked by consistently higher highs and higher lows, indicating sustained positive momentum. A rising trendline acts as a reliable support for the stock's price movements, potentially preventing significant downside.

LKP recommends adopting a "buy on the dip" approach, with an optimal entry point of around 600. It added, "This strategy capitalizes on potential price retracements within the context of the ongoing uptrend."

Cochin Shipyard shares are expected to rise by 16%.

5. Container Corporation Of India (BUY In Range Of Rs 650 - 660 For Target Price of Rs 730/775):

At present, the stock is currently engaged in a sideways trend, indicating a lack of clear directional movement. Resistance is marked at 750, while support is evident around 650. For this stock as well, LKP suggests a "buy on the dip" strategy which seems favourable, particularly around the mentioned support zone at 650.

The strategy involves buying when the stock's price dips to capitalize on potential price rebounds.

"A significant move could transpire once the resistance level at 750 is successfully overcome. This could lead to swift upward momentum, potentially targeting the levels as mentioned."

The stock has a potential upside of 17%.

6. Engineers India (Buy In Range Of Rs 135 - 145 For Target Price Of Rs 175/190):

In the recent 1-2 months, the stock experienced a significant rally, suggesting strong buying interest and positive momentum.

Also, a potential cooling-off period might offer an advantageous buying opportunity. Bulls seem to be active at the lower end, which could provide support and attract fresh buying interest.

Further, the momentum indicator, RSI, is currently trading in an overbought territory. This indicates that the stock's price may be due for a correction. Such a correction could potentially help build up fresh momentum for future movements.

The stock has a potential upside of 31%.

7. GAIL (India) (Buy In Range Of Rs 110 - 115 For Target Price Of Rs 130 / 140):

In this natural gas giant, LKP pointed out that a robust base formation has been established at the lower end of the price range, indicating consistent buying interest across various price levels. Additionally, the stock seems to have found a bottoming point around 100, suggesting that a significant decline in price might have concluded.

LKP said, "Anticipate a vigorous rally in the near term, possibly propelled by the strong buying sentiment observed." It added, "The momentum indicator, RSI, trading in a strong buy territory further supports this outlook."

This oil and gas stock has the potential to rise by 22%.

8. General Insurance Corporation of India (Buy In Range Of Rs 190 - 200 For Target Price Of Rs 221/232):

It needs to be noted that the 50-year-old Largest Re-Insurer accounts for over 65% of the premiums ceded by Indian Insurers providing reinsurance across segments.

Currently, GICRE has given a consolidation breakout. Besides, it is sustaining above 50ema. Hence, its RSI is in a bullish crossover on the weekly timeframe

"The trend is likely to remain positive over the short term," the brokerage said.

It has a potential upside of 16%.

9. Hindustan Copper (Buy In Range Of Rs 140 - 150 For Target Price Of Rs 174/182):

In this metal stock, a robust breakout has occurred on the daily chart, accompanied by a substantial surge in trading volumes. This breakout suggests potential for further upward movement.

Also, its momentum indicator, RSI, has confirmed a positive crossover, signifying a buy signal and indicating increasing positive momentum in the stock's price.

The lower time frame uptrend remains intact, characterized by consistent higher highs and higher lows, indicating sustained positive momentum, it added.

The stock is expected to rise by 21%.

10. Housing & Urban Development Corporation (Buy In The Range Of Rs 60-65 For Target Price of Rs 76/81):

In this housing finance stock, a notable breakout has occurred on the weekly chart, marked by a sharp surge in trading volumes. This breakout signifies the breach of a strong resistance level, implying the potential for further upward movement.

LKP believes that the stock maintains a long-term bullish uptrend, characterized by consistent higher highs and higher lows, highlighting sustained positive momentum. It added, "HUDCO's trading above all long-term moving averages confirms the underlying bullish sentiment and adds to the positive outlook."

HUDCO's share price is expected to rise 25%.

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.