Tata Steel, Petronet, Century Ply & Sapphire Foods: These are 4 stock picks by SMC Global

Amid rising selling pressure in broader markets, domestic brokerage firm SMC Global Securities has suggested four stocks- Tata Steel Ltd, Petronet LNG Ltd, Century Plyboards (India) Ltd, Sapphire Foods India Ltd- to bet amid the limited opportunities to make money. The brokerage has picked the former two based on their solid technical parameters, while the latter two appear to be sound on the fundamental parameters. Here's what the brokerage has to say about these counters:

 

Tata Steel | Buy | Target Price: Rs 180-183 | Stop Loss: Rs 149

Tata Steel reached a 52-week high of 184.60 in June but has since been trading lower, forming a series of lower highs on the daily charts. Recently, it found support around the 145 level and rebounded, surpassing the key resistance mark of Rs 160 after a period of consolidation near its 200-day exponential moving average. Technically, the stock maintains a bullish outlook, as prices are rising in a pattern of higher highs and higher lows on the weekly charts. Additionally, positive divergences in secondary oscillators, along with the upward price movement, indicate a potential upswing for the stock. Therefore, one can buy the stock in range of Rs 163-165 for the upside target of Rs 180-183 levels with stop loss below Rs 149 levels.

 

Century Plyboards (India) | Buy | Target Price: Rs 1,052 | Upside: 22%

Century Plyboards is a manufacturer and distributor of building products.  The company commended commercial production of all products, including MDF, laminate, and PVC, at its Century Panel plant at Badvel, Andhra Pradesh. With this it has doubled its MDF capacity from 900 to 1900 cubic meters. It is a Greenfield project spread across 100 acres. The company expects growth in all segments which would be driven by the newly commissioned facility. Price increase and better cost management are expected to drive margin. Thus, it is expected that the stock will see a price target of Rs 1,052 in 8 to 10 months.

 

Petronet LNG | Buy | Target Price: Rs 410-415 | Stop Loss: Rs 325

Petronet LNG witnessed a series of profit booking and seen retracing back towards Rs 320 levels, after marking its 52-week high of 384.20 in the month of August. Broadly the prices are holding well above its 200-day exponential moving average on daily and weekly intervals. Technically the stock has seen a series of decline with formation of lower bottom pattern on daily charts but last week once again a fresh momentum perceived into the stock as fresh breakout has been observed above the downward sloping channel of declining channel. The sudden spike in volume activity along with price action suggests the next upside into the stock. Therefore, one can buy the stock in range of Rs 350-355 for the upside target of Rs 410-415 levels with stop loss below Rs 325 levels.

 

Sapphire Foods India | Buy | Target Price: 404 | Upside: 15%

Sapphire Foods acquired about 270 KFC and Pizza Hut Stores in India and Sri Lanka, by a group of leading Private Equity firms and is managed by a team of professionals. It is a leading YUM franchisee operator in the Indian subcontinent with presence in India, Sri Lanka and Maldives. The company is focusing on operational efficiency by improving service levels and introducing late night deliveries. It is adding a new restaurant and plans to double its restaurant count. The company is also investing both in marketing and improving or strengthening the consumer experience to revive Pizza Hut brand. Thus, it is expected that the stock will see a price target of Rs 404 in 8 to 10 months.