The domestic markets have seen extreme volatility in the current year 2018 due to global sell-off jitters, trade wars, banking frauds erupting one after other, long-term capital gains tax on equities, boiling crude oil prices. Despite these factors, the benchmark Sensex has returned more than 7% in the last six months. In the corresponding time, many blue-chip stocks such as Hindustan Unilever, Kotak Mahindra Bank, TCS, Tech Mahindra, JSW Steel, Avenue Supermarts, Bajaj Finance, Ashok Leyland, Mahindra & Mahindra, Pidilite Industries, Infosys have risen more than 20%. Notably, a 20%-return by large-cap premium stocks in just six months is quite good as compared to the index returns of only 5-10%.
We take a look at a Rakesh Jhunjhunwala stock which has returned about 20% in the last one month and can gain up to 9% within next 2 months. Interestingly, this company is the largest pharmaceutical firm in India and tenth-largest company in the world by revenue.
Shares of the Mumbai-based pharmaceutical major Lupin Ltd have grown nearly 20% in the last one month to Rs 899.6 from a share price level of Rs 750.8 as on 15 May 2018. The research and brokerage firm HDFC Securities has given buy with a target price of Rs 982 which implies a potential upside of 9% from the current market price of Rs 899.6. “Lupin has rallied smartly in the last few sessions after finding support around the 725 levels in late May 2018. The 725 levels also roughly correspond to previous intermediate lows tested in March 2018, implying a double bottom pattern made by this stock,” HDFC Securities said in a report.
Technical indicators are giving positive signals as the stock trades above the 13-day and 50-day SMA. Daily and weekly
momentum readings are in rising mode and not in overbought territory. We believe the stock has the potential to move higher in the coming weeks as it attempts to test its previous intermediate highs, HDFC report added.
Lupin Ltd is the largest pharmaceutical company in India ahead of firms like Cipla, Dr Reddy’s Laboratories, Aurobindo Pharma, Glenmark and Sun Pharma. The ace investor Rakesh Jhunjhunwala owns about 1.92% stake in Lupin Ltd which accounts for about 86.98 lakh equity shares, according to latest shareholding data available with exchanges. Lupin Ltd is the fifth-largest pharma firm in terms of market capitalisation. At the closing on 14 June 2018, Lupin commands a market capitalisation of Rs 40,632 crore on BSE.
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