Auto, farm-focused stocks on F&O radar

The Sensex and Nifty have in the past two days recovered almost half of the 6% decline witnessed the week before, yet the sentiment remains nervous. Traders are betting on companies with exposure to the agriculture sector and on beaten-down stocks that have bounced driven by news flow. While auto and auto-ancillary companies could move up further on hopes of better sales numbers for September, analysts are advising caution on multiplex operators and Vodafone Idea. ET takes a look at 5 stocks which are seeing a surge in activity:

BALKRISHNA INDUSTRIES
CMP : Rs 1,447.6
OI Change in October Series: 49.87%
Stock Price Change in October Series: 10.87%

Analysts believe the stock has been gaining because of recovery in demand for farm vehicle tyres. Nomura expects Balkrishna Industries’ volumes to benefit from the strong traction in the agri segment. Technical analysts said the stock is likely to rise 8-10% more. It has gained 10% in September so far. “The stock has seen a major breakout on daily, weekly and monthly scales. It can go to at least Rs 1,600-Rs 1,620 levels,” said Chandan Taparia, derivatives analyst at Motilal Oswal

VODAFONE IDEA
CMP : Rs 10.3
OI Change in October Series: 14.7%
Stock Price Change in October Series: 13.7%
The recent optimism in the stock has come on the back of Vodafone Group Plc winning an arbitration case against the Indian government over a Rs 20,000-crore retrospective tax dispute. However, analysts believe this optimism will be short-lived. Analysts believe that if tariffs do not increase, a significant portion of Vodafone Idea’s equity value is likely to be at risk. Goldman Sachs in a note last week maintained a sell rating on Vodafone Idea with a target price of Rs 3.3.

PVR
CMP : Rs 1,233.6
OI Change in October Series: 15.75%
Stock Price Change in October Series: 16.2%
The main surge in PVR in the October series came on Monday on reports that the West Bengal government has announced that it would allow cinema halls to open for a limited crowd from October 1. Maybank Kim Eng Securities said the development is a ‘mild positive’ for multiplex operators. “While West Bengal accounts only for around 10% of total screens of PVR and Inox Leisure, we believe this is positive as more states may follow suit. Also, PVRL and INOL will get the opportunity to implement their standard operating procedure (SOPs) which will help address the fear among moviegoers,” the brokerage said.

ESCORTS
CMP: Rs 1,295.6
OI Change in October Series: 32%
Stock Price Change in October Series: 1.9%
The stock has seen build-up of long positions in the October futures on expectations of strong tractor sales. It has rallied 19% in September so far. The stock hit a record high on Monday after the company announced the commissioning of manufacturing operations of a joint venture with Kubota Corporation. Taparia of Motilal Oswal said the stock can rise further to Rs 1,380-Rs 1400 in the near term

APOLLO HOSPITALS
CMP : Rs 2,059.9
OI Change in October Series: 25.2%
Stock Price Change in October Series: 5.8%
The stock hit a record high on Monday amid expectation of improved earnings going forward. Nomura has maintained a ‘buy’ rating on the stock recently and said that Covid-19 will have a limited impact on long-term value of the asset. Nagaraj Shetti, technical research analyst at HDFC securities, said the Rs 2,250-level is where the stock is likely to face resistance and support is placed at Rs 1,950