Stocks to buy: Birlasoft, Ahluwalia Contracts among HDFC Securities’ fundamental picks for six-nine months horizon
Ahluwalia Contracts' margin to improve from FY24 with softening of commodity prices, a narrower gap of indices with input prices, slightly lesser competitive intensity and new projects bid at elevated input price assumption. The company’s robust and diversified order book, strong bidding pipeline, timely execution could help to bring more orders going forward, HDFC Securities said.
“Investors can buy the stock in the ₹690-704 band and add more on dips to ₹615-629. We feel the Base case fair value of the stock is ₹771 and the Bull case fair value is ₹821 over the next two to three quarters," said the brokerage.
(Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) The CK Birla Group company, Birlasoft’s growth prospects in digital and cloud infrastructure services, sharpened focus to build key business verticals through a micro-vertical strategy and a focused effort to scale up contribution from top-tier clients, provides revenue visibility for Birlasoft in the medium term, analysts said. Q1FY24 saw a dip in new TCVs as some deals got rolled over to Q2.
Birlasoft plans to give salary hikes starting September 1st, which may have a negative impact on margins in the short term, according to the brokerage firm. HDFC Securities has a base case target price of ₹560 and the bull case target price is ₹597 per share over the next two to three quarters.
It suggests investors can buy in the ₹505-520 band and add further on dips in the ₹446-456 band. Also Read: Stocks to buy: Biocon, Dr Reddy’s, Sun Pharma, among Phillip Capital’s pharma stock picks for up to 22% upside HDFC Securities remains bullish about the near to mid-term prospects
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