Budget stock picks: Larsen & Toubro, Axis Bank, Tata Motors, among stocks to buy, strong upside seen

Backed by technical and fundamental analysis, ICICI Direct has picked 10 stocks that investors can buy ahead of the Union Budget. 

Union Budget
Stocks to buy ahead of Union Budget. (Image: REUTERS)

Domestic benchmark indices have seen a volatile few trading sessions ahead of the Union Budget 2022. Sensex and Nifty both are currently sitting nearly 7% away from their all-time highs. Selling by foreign investors, geopolitical tensions, and nervousness on Dalal Street ahead of the Union Budget are factors contributing to the volatile movement of domestic stock markets. Nearing the Union Budget, volatility may continue to soar higher and it might be imperative for investors to pick the right stocks. Backed by technical and fundamental analysis, ICICI Direct has picked 10 stocks that investors can buy ahead of the Union Budget. 

Larsen & Toubro
Target price: Rs 2,168 per share

The large-cap stock has gained about 1% so far this year, outperforming the benchmarks. On the technical front, ICICI Direct expects the stock to regain upward momentum, challenge all-time high and gradually head towards Rs 2168 as it is the upper band of rising channel. “Within the capital goods space, we remain constructive on Larsen & Toubro as elevated buying demand emerges from the lower band of rising channel, thereby confirming secular uptrend is intact and offers fresh entry opportunity,” they said. L&T’s strong order book of Rs 3,30,541 crore suggest good revenue visibility in coming years. Target price suggests 12% uspide.

Axis Bank
Target price: Rs 870

Private sector lender Axis Bank is resolving out of higher base formation above 52 weeks EMA coincided with lower band of upward slanting channel, indicating rejuvenation of upward momentum, said ICICI Direct. “We expect the stock to resolve higher and head towards Rs 870, which is near all-time high recorded during Oct-21,” they added. The target price suggests 12% upside.

Tata Motors
Target price: Rs 555

Auto giant Tata Motors is a play on domestic as well as global market and evolving as an electric-vehicle play as well. “The stock has undergone a shallow correction of its September-October rally ( Rs 268-535) wherein the 12 week gain has been retracted by only 38.2% over the past 11 weeks. Shallow price retracement indicates lack of selling pressure and continued demand for stock around the 50-day EMA, which has been held over the past 22 months,” ICICI Direct said. 10% upside potential seen.

United Spirits
Target price: Rs 970

The stock is seen to be breaking out of its six-year consolidation phase (Rs 800- Rs 450) signalling structural turn-around and a new bull cycle ahead. “We expect the stock price to head towards | 970 levels as it is 80% retracement of the recent breather (Rs 1020-832),” ICICI Direct said. Analysts see an 11.5% upside. 

Bank of Baroda
Target price: Rs 116

Within the PSU banks, analysts at ICICI Direct are positive on Bank of Baroda as it has formed a higher base above multi-year falling trend line breakout area and is now forming a higher high-low, indicating resumption of primary up-trend. “We believe improving business outlook along with containment of slippages could help overall operational performance and earnings trajectory to improve ahead,” ICICI Direct said. 10.5% upside seen.

Container Corporation of India
Target price: Rs 698

The stock is seen rebounding taking support at the rising 12 months EMA (currently at Rs 611) and the previous major breakout area joining highs since CY2015 thus offering fresh entry opportunity with a favourable risk-reward set up, according to ICICI Direct. The set target price suggests an 8% upside.

KPR Mills
Target price: Rs 765

“The textile stocks have been in focus as many companies are witnessing structural turnaround. KPR Mills has been an outperformer within the textile space-maintaining higher peak and higher trough in all time frames and we expect it to continue with its outperformance,” ICICI Direct said. The stock will have to surge 15%.

National Aluminium
Target price: Rs 125

National Aluminium stock is in steady up trend and earlier during the year in October 2021 has generated a breakout above its four-year range signalling a structural turnaround, said ICICI Direct. “The stock has recently rebounded taking support at the lower band of the rising channel thus offering fresh entry opportunity,” they added. Target price hints at 13.6% upside potential.

Bharat Dynamics
Target price: Rs 548

Analysts believe Bharat Dynamics is the perfect proxy to PSU theme ahead of Budget. “The stock has generated multi-year breakout on the back of rising volume, indicating the start of a new bull phase. Thus, it offers a fresh entry opportunity to ride the next leg of secular up move,” ICICI Direct said. 121.5% upside potential seen.

KNR Construction
Target price: Rs 358

“The stock has witnessed a Change of Polarity as a major long term supply line resistance joining highs since CY 2017 has reversed its role post a breakout in July 2021 and is acting as a support signalling positive bias,” said ICICI Direct. The target price suggests 17% upside potential.

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