Brokerage ICICI Securities has a bullish outlook for Voltas and L&T Technology Services (LTTS) shares. Brokerage recommended buying range 960-984. with stop loss of target price of 914.00 and 1,084.00 for Voltas shares. The brokerage has a target price Shopping Range of 3450 & more With stop loss for 2980-3030 LTTS 2768. Both these stocks were given a buy recommendation by the brokerage today, July 7, 2022 for a strong bounce within 3 months of the target frame.
voltas
ICICI Securities said in a note that “Consumer discretionary space is moving upwards after witnessing price and timing correction. Besides, fall in metal prices (copper, aluminium) will help in easing the inflationary pressure of raw materials for AC companies. Its main beneficiary will be Voltas. We remain constructive on Voltas as the stock has formed a strong base around key support 920, which has been conducted on several occasions in the last 15 months. Therefore, it provides a new entry opportunity with favorable risk reward.”
“We expect the stock to resolve higher and move slowly 1084 in the coming months as it is the confluence of the 38.20% retracement of the April-May decline ( 1348-922), and the price parity of the May-June rally ( 922-1058) estimated from mid-June lows 934. On the Oscillator front, the Weekly Stochastic registered a bullish crossover, indicating a positive bias,” the brokerage said.
“The company aims to achieve 10% market share for the Voltbeck brand by 2025. Voltas has also entered into a joint venture with Hailey International (Hong Kong) Limited to manufacture compressors in India. In the long run, we expect the company’s market share in the RAC segment to increase due to rising incomes and aspirations of middle class households in India, which will be a key demand driver for cooling products. We generate 17.2% Revenue CAGR and 37.5% PAT CAGR for Voltas in FY22-24E. The company has a healthy balance sheet with strong return ratios, with ROE of ~11% and ROCE of ~15%, said research analysts at ICICI Securities.
L&T Technology Services (LTTS)
The brokerage said that “the technology space has been largely confined over the past few weeks with stocks like LTTS underperforming its peers. LTTS declined nearly 50% from its highs at the start of the year.” and is showing early signs of recovery.We believe the stock has a lot of upside potential and the recent recovery is likely to continue 3400 and higher. The open interest in the stock has risen sharply in the last few months. The stock had the highest open interest since its inception in the F&O space. However, in the last few seasons of the July series, there were signs of short covering due to the closure of open interest. We believe short covering will continue, which may take the stock higher in the coming trading sessions.”
“On the options front, after we have seen significant writing in 3000 and 3200 call strike, the highest call OI basis for July series is at 3200 strike. However, ATM calls of around 3000 strikes are continuously appearing on strike. With early signs of closure among call writers, we expect the stock to be well placed to surpass its call base. Also, writing is visible on 3000 and 2800 put strike which should act as support level on downside,” claimed research analysts at ICICI Securities.
“The stock witnessed relatively high delivery based activity since mid-June when it was hovering around 3000 levels. After a round of consolidation around these levels, it is finally exiting consolidation. Besides, the delivery volumes were seen near the support level. Therefore, the stock is likely to resume its upward trend amid positive consolidation ahead of the quarterly results. The Delivery Z score reading in the Cash segment indicates that there is still room for delivery pick-up in the coming days. In due course, the stock should move upwards,” the brokerage said.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.