Technical Report – HPCL: Fuelled for growth – BUY
CMP Rs498, Target Rs700, Upside 40%
HPCL on the long term charts has given a breakout from an inverted head & shoulders pattern with impressive volumes. Technically, the stock is showing strength and given the positive oscillators set-up, the stock could outperform in the medium-term as long as it sustains above its 50-DMA of Rs420. We recommend a BUY on the stock for a conservative target of Rs700 with a stop loss of Rs420.
Express Idea: Indian Hume Pipes Co – BUY
CMP Rs305, Target Rs366, Upside 20.2%
Indian Hume Pipes Co (IHP) is a major player in the water infrastructure segment in India. The company would be a major beneficiary of the Government’s focus to provide sanitation to all by 2019 and developing 100 smart cities. The company has received large orders from various states for sewerage and water supply. Order book has increased 157% over FY11-14 to Rs25.9bn, providing strong revenue growth visibility (BTB 0f 3.4x) over FY14-17E. Margins are expected to improve on the back of higher execution, marginally lower input costs and operational efficiencies. Earnings over the next two years are expected to more than double to Rs555mn in FY16 from Rs241mn in FY14. We believe there would be some re-rating in the near term due to strong order book, high growth outlook and healthy balance sheet. We recommend a BUY on the stock with a price target of Rs366.
Express Idea: Strides Arcolab – BUY
CMP Rs742, Target Rs830, Upside 11.9%
– Ex-Agila business set for robust traction
– Institutional business to pick up; branded growth on an upswing
– Potential cash payouts cushion downside; BUY