2 Stocks To Buy For Up To 19% Gains By ICICI Direct And Axis Direct

Indices in trade today are trading firm and are very close to hitting fresh highs. Amid strong momentum, 2 brokerages have come up with 2 stock recommendations for quick gains in the short term:

ICICI Securities:

Axis Securities has initiated coverage on ICICI Securities and given a 'Buy', giving a target price of Rs. 870 per share. This is an almost 18.6% from the last traded price of Rs. 733.5. The company is at the 4th position in terms of active clients in FY21 despite massive competition from discount brokers.
Nonetheless as similar to other sectors, the broking industry is consolidating too in favour of digital and large players.

"We believe ICICI Securities is well-placed as the industry leader and we expect its growth to be driven by (1) Longterm industry tailwinds; (2) Limited revenue cyclicity owing to the diversified product basket as well as its efforts to further diversify revenue stream; (3) Improving customer sourcing and activation through proactive use of the digital platform; and (4) Improving profitability due to its cost rationalization efforts", said the brokerage.

Traction in investment will be seen and this will be positive for the brokerage firm

Investments in the Indian economy will be driven on account of:

a) Digital initiatives increasing ease of transaction;

b) Superior returns offered by the equity markets vis-à-vis traditional investments;

c) Higher investor awareness coupled with increased retail participation aiding growth over the medium to long term.

Valuation:

ICICI Securities is eligible to trade at premium valuation vs its peers given its superior ROE profile, strong parentage, and competent management team. We initiate coverage with a 'BUY rating and a target price of Rs 870/share (19x Sept'23E EPS), implying an upside of 22% from the recommended price.

PVR:

ICICI Direct has suggested to buy the scrip of multiplex company PVR for a target price of Rs. 1592, implying gains of 13.71% from the current price of Rs. 1410.15. Further the brokerage firm is recommending a buy on the scrip for a period of 3 months and stop loss of Rs. 1275

Observation for the scrip by ICICI Direct:

Media space showing underperformance has been a major laggard.
But beaten down stocks from the space are likely to show outperformance going ahead.

Technicals

The company recovered from its major support of Rs. 1280-1300 levels. "We expect fresh longs to follow the recent accumulation in the stock.The open interest in the stock has increased gradually in the last two weeks along with a price recovery. Current OI in the stock is at a six month high. This month we saw additions of 60% in open interest. Considering continuous additions and recovery of the stock, we expect further fresh accumulation to be seen, which should take it higher in the coming sessions. The stock has been witnessing accumulation near the support level of Rs. 1300. With continued Put writing in 1300 strikes, we expect downside risk to be limited. On the other hand, Call OI of 1400 strike is already witnessing closure of positions suggesting upsides in the stock. These positions are expected to aid it to break the option range on the higher side. The stock has seen noteworthy delivery based action around Rs. 1300-1340 in the last couple of months. Since then, it has remained in a narrow range. With early signs of the stock moving out of the prevailing range, we expect its upward momentum to endure. The delivery Z-Score has again started to move into the positive territory since May 2021 as the stock is witnessing fresh accumulation in the delivery segment", added the brokerage report.

Disclaimer:

The stocks mentioned here are taken from brokerage report and should not be construed for investment advice.

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