Mukesh Ambani’s Reliance Industries Ltd (RIL) share price has fallen more than 11% since the middle of October. The stock now sits close to the previous break-out levels, hinting at a fresh buying opportunity for investors, said analysts at ICICI Direct. Apart from the oil-to-telecom conglomerate, analysts at ICICI Direct have picked Hindalco and Jindal Stainless as their stock picks backed by fundamentals and technical analysis. For the metal space, the brokerage firm is bullish expecting a structural uptrend after a healthy price/time correction.
Reliance Industries
Target – Rs 2,745
Analysts at ICICI Direct noted that the telecom sector has been outperforming after a multi-year breakout seen in September, and pointed out RIL as a preferred proxy play for the sector. The stock, according to analysts, has reached its key support levels thus offering a favourable risk reward opportunity. “Key point to highlight is that over the past 8 weeks it has retraced 61.8% of past 10 weeks rally and retested the previous breakout area signalling inherent strength and augurs well for next leg of up-move in structural uptrend. We expect the stock to resolve higher and gradually challenge its life highs of Rs 2750.
On the fundamental side, ICICI Direct said that long term prospects and dominant standing of Reliance Industries in each of its product and service portfolio provide comfort for long term value creation. For the stock to reach the target price it will have to rally 13% from current levels.
Hindalco
Target – Rs 508
Hindalco share price has rallied 11% so far in the month of December. “The stock is currently seen rebounding taking support near the lower band of the rising channel and 200 days EMA (currently placed at | 403) thus offers a fresh entry opportunity with a favourable risk-reward set up,” said ICICI Direct. Key support zone for the stock is seen at Rs 400-430 per share.
Fundamentally, healthy performance by wholly owned subsidiary Novelis has aided Hindalco’s consolidated operation’s performance, ICICI Direct said. “Going forward also on the back of healthy demand from key user industries, Novelis is likely to continue with its good performance, auguring well for consolidated entity,” they added. Hindalco share price will have to surge 10% to reach the set target price.
Jindal Stainless share price has zoomed 10% so far this month. “The stock has managed to hold above upward sloping support trend line joining lows since June 2020, highlighting elevated buying demand that signifies inherent strength,” technical analysts at ICICI Direct said while adding that the stock could head towards all-time high of Rs 207 per share.
Jindal Stainless is India’s largest stainless steel manufacturer, with its Jajpur, Odisha plant having a total stainless steel capacity of 1.1 million tonnes per annum. “The company also plans to increase its downstream capacity by increasing the capacity of hot rolled annealed pickled (HRAP) and cold rolled annealed pickled,” ICICI Direct said. The target price set by ICICI Direct would see the stock rally 11% from current levels.