Bosch, Mahindra and Mahindra top stock picks for next 3 months, analysts see strong upside, check target price

ICICI Direct has picked Bosch and Mahindra & Mahindra as Gladiator Stocks that could rally in the next three months.

Stocks to buy (Image: REUTERS)

Domestic stock markets have recently started moving upward after weeks of downward momentum plagued Dalal Street. Technical analysts believe NSE Nifty 50 index could be breaching 16000 soon if there is no catalyst for bears. Global cues were also positive with Asian stock markets zooming higher on Monday morning, mirroring the up-move charted by Wall Street stock indices on Friday. Amid this, ICICI Direct has picked Bosch and Mahindra & Mahindra as Gladiator Stocks that could rally in the next three months. Both the stocks are believed to be having strong technical and fundamental backing. 

Mahindra & Mahindra: BUY
Target: 1,130 per share | Stop loss: Rs 939
Upside: 5%

The auto sector has displayed remarkable outperformance over the past few month’s corrective phases in broader markets, said ICICI Direct. In this space, Mahindra & Mahindra remains a top pick for the brokerage firm as it relatively outperformed within the auto OEM space after a multiyear breakout that spells structural turnaround. “Over the past couple of weeks, the share price underwent a breather after the strong rally in March-May 2022 wherein elevated buying demand emerged at multiyear breakout levels of | 970. Follow-through buying demand at breakout levels corroborates positive stance and provides fresh entry opportunity,” they said. The stock is expected to zoom to Rs 1,150 per share from the current Rs 1,072 per share, translating to an upside of more than 5%

“We retain our positive view on M&M amid healthy demand prospects across its product profile and its focus towards capital efficiency and EV proactiveness,” ICICI Direct said. A stop loss at Rs 939 apiece has been recommended.

Bosch: BUY
Target: Rs 15,500 per share | Stop loss: 12,700
Upside: 8%

Analysts said that a potential double bottom formation at key support offers a fresh entry opportunity. They added that within ancillary stocks, Bosch has undergone significant price/time correction over the past six years. “Technically, at the current juncture, the stock provides an extremely favourable risk-reward setup from a medium-term perspective.” ICICI Direct expects the stock to zoom to 15,500 over the next few months, which is 38.2% retracement of past eight month’s fall (19,250-13,000). The up-move to 15,500 could result in a more than 8% rally in the stock.

Fundamentally, Bosch is a technology leader providing solutions in automotive, industrial technology, consumer goods, energy & building technology. “Building in the positives driven by recovery in the volumes in the auto space, particularly CV segment, we expect topline at the company to grow at a CAGR of 16.5% over FY22-24E with operating leverage gains seen aiding margin improvement to 13.5% by FY24E.,” ICICI Direct said.

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