Large-cap stock could hit a new 1-year-high in a target frame of 3 months: Buy?

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With a market worth of Rs. 37,348.54 crore, Cummins India Ltd. is a large-cap firm in the engineering sector. The nation’s top producer of diesel and natural gas engines is Cummins India Limited. Engine, Power Systems, and Distribution are the three business divisions that makeup Cummins India Limited, one of the seven legal companies that make up the Cummins Group in India. A fresh 52-week high for the stock is anticipated by the research experts of the brokerage company ICICI Direct Research, who have advised buying the stock.

The research analysts of the brokerage firm ICICI Direct Research have recommended buying the stock in a range of 1345-1370, by maintaining a stop loss of 1,245.00, and have set a target price of 1,555.00 in a target frame of 3 months.

The research analysts of the brokerage firm ICICI Direct Research said in a note that “The capital goods sector has been one of the key outperformers of CY22 and is seen extending its up move after the sector index gave a breakout from decade long consolidation in CY21. Within the sector, we remain constructive on Cummins India as it has generated a breakout above the bullish flag pattern signalling continuance of the up move and offers a fresh entry opportunity.”

“The stock, earlier during October 2022, resolved above multi-year consolidation phase, indicating a structural turnaround. In the smaller time frame, it recently generated a faster retracement of the last nine week’s decline ( 1289-1150) in just four weeks highlighting the robust price structure. In the last two years, on multiple occasions the stock has rebounded from the 20 week’s EMA, thus providing incremental buying opportunity. In the current scenario also, it has formed a higher base above the 20 week’s EMA (currently at 1206) highlighting inherent strength,” they said.

They further claimed that “We expect the stock to continue its positive momentum and head towards 1555 in coming months as it is the confluence of the measuring implication of the recent flag breakout and the price parity with the previous up move ( 951- 1289) as projected from the recent trough of 1150.”

On the NSE, the shares of Cummins India Ltd closed on Friday at 1,342.05 apiece, up by 0.09% from the previous close of 1,340.80. In its last trading session, the stock recorded a total volume of 763,460 shares compared to the 20-Day average volume of 591,812 shares. The stock had touched a 52-week-high of 1,380.00 on (07-November-2022) and a 52-week-low of 842.00 on (29-November-2021), hence the target price of 1,555.00 set by brokerage if met would be a new 1-year high for the stock.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

 

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