Stocks to buy today: After copper prices hit a 17-month low on Monday, shares of power cables makers have suddenly emerged as major beneficiaries of this development as the fall in metal prices could lead to inventory destocking and revival in private capex. Is. Owing to these gains, the shares of Polycab India, Havells India, Finolex Cables, KEI Industries etc are expected to rise and hence market experts are betting on such copper wire manufacturers.
asked about stocks to buy today On the fall in copper prices, Rajesh Sinha, Senior Research Analyst, Bonanza Portfolio, said, “Last year copper prices were on an uptrend and have been reached. 840 per kg in MCX in the month of April 2022. The rally in copper was driven by concerns about demand for clean-energy investments and supply from top producers in Chile and Peru. The Russo-Ukraine war also raised supply concerns and pushed prices to record highs. However, since then copper prices have been on a correction mode in China after the COVID lockdown and slowing economic growth has dampened demand. Hawkish policy and fear of recession in America are also major factors of this reform. In MCX copper is trading at Rs. 666/KG, correcting more than 20 percent from recent highs.”
Bonanza portfolio expert further said that wire and cable companies are expected to be major gainers as copper accounts for a major part of its raw material cost, “In Polycab India, copper accounts for 56 per cent of its raw material cost, while in KEI Udyog, Havells and Finolex Cables This is 35 per cent, 28 per cent and 60 per cent respectively. With the reduction in copper prices, we feel the margins of these companies go up. With the lower raw material cost, the company has further The flexibility to grow is to gain market share while benefiting the end customer.”
On how the fall in copper prices will boost the above stocks, Puneet Patni, Equity Research Analyst, Swastika Investmart said, “The fall in copper prices will benefit the electric wire manufacturers. Due to high inflation of key raw materials, These companies had increased their product prices and now any fall in the prices of key raw materials will boost their gross margins in the short term.”
Advising positional investors to buy Polycab and Havells shares, Sumeet Bagdia, Executive Director, Choice Broking said, “Positional short term investors can buy Polycab India and Havells India shares and take advantage of the fall in copper prices. .Polycab shares may go up. 2250 each while Havells India share price is expected to touch the level of 1225 per share in the short term.”
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.