Escorts Kubota is Anand Rathi’s stock pick for December; 11.55% upside seen; should you buy? | Stock Market News
Source: Live Mint
Breakout stocks: Domestic brokerage firm Anand Rathi Investment Services has picked Escorts Kubota Limited as its stock pick of the month for December 2024 with a potential upside of 11.55 per cent.
Shares of Escorts Kubota Limited, an agriculture machinery and tractor manufacturer, closed 3.43 per cent higher at ₹3,260.30 in Friday’s trading session, compared to ₹3,152.10 at the previous market close.
According to Anand Rathi’s stock pick report, the shares have witnessed a significant 30 per cent correction from their peak level, bringing them closer to support of ₹3,250 levels with the market profile point of control.
On the technical front, the brokerage said, “Recent price action suggests selling pressure is waning, as indicated by the RSI recovering from oversold territory. Additionally, a Bullish Butterfly pattern has formed near this support zone, signalling a potential trend reversal.”
“This convergence of technical factors creates an opportunity for a rebound,” said analysts at Anand Rathi Investment Services.
“Traders are advised to consider buying in the ₹3,250- ₹3,330 range, setting a stop-loss at ₹3,100 to manage downside risk. The upside target is projected at ₹3,670, presenting a favourable risk-reward ratio,” they said.
Stocks to Buy
Escorts Kubota Ltd. (ESCORTS): Buy at ₹3,250-3,330; Target Price is ₹3,670; Stop loss at ₹3,100.
About Escorts Kubota’s business
Tractor manufacturer Escorts Kubota continues to face challenges, such as industry export volumes plunging 30 per cent year-on-year (YoY) during the period of April to November due to high inventory levels, weaker used market pricing, and adverse weather conditions, reported Mint earlier.
However, after the Reserve Bank of India’s approvals, Escort is poised to invest ₹700 crore in its financing arm to reduce turnaround times and boost the company’s market share.
“This was an area where Escorts fell short compared to peers. The new finance arm is likely to provide added flexibility and support for tractor and construction equipment sales, aiding its market share,” Mitul Shah, an analyst at Dam Capital Advisors, told Mint on December 27.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
