with market valuation of 42,078 Crore, Bosch Limited is a large-cap corporation dealing in the auto accessories industry. Bosch Limited (Bosch) offers products and services in the fields of consumer goods, energy and construction technology. The stock has gained 7.44 per cent in the last five trading days and closed on Friday at 14,300 on the NSE, up 3.46 per cent from the previous close. The company is almost debt free and has a stable high promoter stake of 70.54% for the past 3 years. With a target price of Rs. 15500 and a stop loss of Rs. 12700 is bullish on the stock of brokerage company ICICI Securities. The stock has a potential growth of around 9% from the brokerage’s defined buy range of 13900-14250 with a target period of three months.
According to ICICI Securities “The auto and auto ancillary sector has been exemplary in its relative outperformance amid the recent market correction phase. Within ancillary stocks, Bosch has made significant price/time corrections over the past six years. Technically, the current Over time, the stock offers a highly favorable risk-reward setup from a medium-term perspective.”
Bullish on Bosch shares, ICICI Securities said in a note that “the share price has halted its decline and has formed a potential double bottom bullish reversal pattern as the May 2022 low of 12900 will retest in June 2022.” Consistently on the 50% retracement of the entire 2020-21 rally (7850-19250), which coincides with the key swing lows of May and June 2021. Structurally , the share price retraced its 11-week rally (13412-19250) in eight months. The slow pace of the retracement indicates that the strength inherent in the stock is slowly coming back.”
The brokerage further claimed that “Weekly RSI has formed a positive divergence against its own May lows and has also given a breakout above the declining trend line, which is in force since October 2021, indicating an upward momentum.” is showing early signs of revival in the U.S.
Building in positivity driven by the recovery in volumes in the auto space particularly CV segment, we expect the company to grow at a CAGR of 16.5% in FY 2012-24E with operating leverage gains in FY24 Margin improvement of up to 13.5% has been observed till E. ICICI Securities said by valuing the stock at ~25x PE on FY24E, PAT growth in the above period has been placed at 18% CAGR, resulting in RoCE expected to be 14% and core RoIC 46%.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.