Top Stocks To Buy In Samvat 2080: Tata Motors, 5 Other Stocks Have Potential To Give Hefty Returns

Samvat 2080 has commenced in India, and brokerage Fiscom has maintained a positive outlook on stocks for a long-term basis. This brokerage has selected six stocks for this lunar calendar year which are attractive to buy for value-returns specifically over 3 years to 5 years and beyond despite short-term volatility. These stocks are Tata Motors, Torrent Power, DLF, Dr Reddy's Laboratories, PNB Housing Finance, and IDBI Bank.

In its Diwali picks report, Fisdom said, "In the financial world of Samvat 2080, it seems we're in for a bit more uncertainty before things become clearer, and this transition might take some time. What's causing the market's ups and downs are the big economic factors. We're grappling with challenges like the direction of rising oil prices, increasing interest rates on bonds, changes in the strength of the dollar, and how global tensions are evolving. Additionally, current market valuations don't offer much room for further expansion."

It added, "The key to driving market returns in the future is an increase in corporate earnings. We maintain a positive outlook on stocks for the long term, specifically over 3 to 5 years and beyond However, it's worth acknowledging that we may encounter short-term volatility along the way."

Fisdom pointed out that overall, India is shifting its focus from being a consumer-driven economy to one that's more about producing things, particularly with the help of initiatives like the Production-Linked Incentive (PLI) scheme and substantial investments. This change, combined with a robust economic foundation, has the potential to accelerate economic growth.

Further, the brokerage said, "Investors should refine their strategies for diversifying their investments across various asset classes and leverage market fluctuations to build long-term positions."

Accordingly, Fisdom has recommended buying a total of six stocks. Here are the rationale and technical outlook of these stocks by Fisdom:

1. Tata Motors:

Despite challenges such as high-interest rates, fuel price fluctuations, and inflation, Fisdom maintains an optimistic outlook for the demand environment. The company is set to continue its demand-driven strategy to enhance competitiveness throughout the year.

Q1FY24 earnings mark a strong start to the fiscal year, with all automotive segments performing well. It added, "We are confident in sustaining this positive momentum throughout the year and achieving our objectives. Cost-saving initiatives, particularly within the JLR segment, along with improvements in the chip shortage situation and a favourable product mix, are expected to be key drivers of our success."

Over the past eight years, Tata Motors' monthly price chart has shown an inverted head and shoulder pattern, with a recent breakout. The MACD indicates a bullish trend, and the RSI (14) stands at 65, affirming positivity. Prices remain above the 21 and 50 exponential moving averages.

Oscillators suggest a 'buy-on-dip' approach. A critical support level at 550 - 525 bolsters the bullish case, and potential upside targets lie at uncharted levels of 710 and 750, driven by the breakout and continued upward momentum.

Torrent Power:

The increasing energy demand presents challenges and opportunities. The government's capital investment focus to address demand growth is crucial. Torrent Power is well-prepared to benefit from this transition, with its strong thermal generation business, recent success in securing merchant power tenders, and solid financial position, poised for growth in the energy sector.

Torrent Power surged from 396 to 606 levels, yielding a 60% return in 12 months. After 18 months of consolidation, it broke out from a bullish rectangle pattern on the monthly chart.

Prices stay above the 21-day exponential moving average, and most indicators signal a bullish trend. Strong buying support exists at 625 - 595 levels, with potential targets around 785 and 850, based on the breakout and anticipated upward trend.

DLF:

The brokerage maintains a positive outlook on the housing market with sustained demand. DLF's strong financial performance, proactive debt reduction, strategic market expansion and a robust pipeline of new products position the company for continued growth and profitability. With a promising trajectory, DLF stands as a strong player in the real estate sector.

DLF has been in a multi-year rounding bottom pattern for over a decade, with trend line resistance at 450 on the monthly chart. A bullish cup-and-handle pattern breakout on the monthly chart has prices trading above the upper pattern band, accompanied by above-average volumes, indicating a robust breakout. Prices have retraced near the 450-trend line resistance, now serving as support.

The momentum oscillator RSI (14) resides in a bullish range shift zone, above the horizontal trend line support at 52, currently near 70 with a potential bullish crossover. Consider entry at current levels and on dips around 545, with support at 475 - 450 and upside potential to 700-715 levels.

Dr Reddy's Lab:

Fisdom is confident that the company's approach, involving investments in diverse businesses and launching new products in the US and Europe, holds the potential for sustained long-term growth. Additionally, their strategy to expand the global reach of Biosimilars to new markets is set to further catalyze this growth.

The company recently broke out on the monthly chart with significant volumes, forming a triangle pattern, implying a potential continuation of the previous uptrend. RSI (14) shows a bullish range shift on the monthly chart, and the MACD remains consistently above its polarity line. Prices are trading above the 9 and 21-period EMA, acting as support.

Support levels are at 4,700 - 4,650, and potential upside targets are around 6,000 and 6,300 based on the breakout.

PNB Housing Finance:

The company's strong financial performance, marked by significant growth in PAT and disbursements, suggests a positive outlook. Positive assessments from rating agencies and increased institutional investments reflect growing confidence. Strategic shifts towards retail lending and affordable loans have proven successful, with the expanding retail segment showing promise. These developments position the company for continued growth and success in the future.

PNB Housing Finance has recently broken out of an ascending triangle pattern with strong volumes on the monthly chart, indicating a bullish trend. A golden cross has formed as the 21-month exponential moving average crossed above the 50-month average, and the RSI (14) shows a bullish cup and handle pattern breakout.

The MACD indicator also signals a bullish trend. Consider entry at current levels and on dips near 675, with potential targets at 860 - 900 levels.

IDBI Bank:

The recent correction in the stock is partly linked to the offloading of bad loans. This may have a negative impact in the short term as banks may incur losses on these loans. However, from a future perspective, this move can benefit the bank by cleaning up its balance sheet and reducing the burden of non-performing assets. Such positive actions contribute to the bank's overall financial health and long-term profitability.

IDBI Bank's price broke out from an ascending triangle pattern in October with strong volumes. A golden cross of the 21-month EMA over the 50-month average occurred. RSI (14) shows higher lows and a breakout, while the MACD indicator is trending upward with a bullish crossover.

Consider entry at current levels or near 57, with support at 54 - 52.50 and potential upside targets of 72 - 75.