Rahul Sharma is betting on JM Financials, DCW and Srikalahasthi Pipes. Here's why

We are bullish in the long term but in the short term, we can see a sharp correction coming in the market which will be treated as a very healthy correction, says Rahul Sharma, Co-founder, Equity99 Advisors.

On JM Financials
JM Financial Services has got diversified businesses. Apart from broking, their other verticals are doing really well. I am expecting good numbers from the company and also all the broking and financial companies like Geojit or Motilal Oswal which have been performing really well. JM Financial is trading below its February 2014 levels and has not been able to cross the pre-Covid level so far. But technical parameters have given clear indications of the whole scenario building up in a very bullish manner. The target price for JM Financial is Rs 125 and the stop loss is at Rs 85.

On Srikalahasthi Pipes which has some very marquee names including Dolly Khanna
Srikalahasthi Pipes is one of the leading players in the DI pipes industry in India. Their key products include DI pipes, pig iron, coke and cements and some of the marquee clients are like Larsen & Toubro, NCC Ltd, Indian New Pipes. The company has been working regularly to reduce its debt. The stock is trading at around 0.72 book value and the company has been maintaining a very heavy dividend payout and will also include nal se jal scheme of government. Really good sales have been reported for FY2021 at around Rs 1,500 crore. Operating profit was around Rs 181 crore, net profit around Rs 104 crore. Technically, it is standing at a junction at which the breakout will take the stock to a new trajectory. Overall parameters are looking good for this company. The target price will be Rs 275-300 and stop loss will be placed at Rs 210.


On DCW (formerly Dhangadra Chemical Works)
DCW is the sole manufacturer of chlorinated polyvinyl chloride which is called CPVC and stands to benefit from the government’s recently announced anti-dumping duty on unfairly subsidised import of CPVC. On a fundamental side, we have seen good growth in quarterly net profit and increasing profit margin on YoY basis, increasing profits every quarter for the last four quarters, increasing revenue every quarter for the past three quarters. After a long consolidation between Rs 34 to 40-41-42, we are witnessing record breaking volumes and there is a flag pattern breakout also. Good upside movement is expected from here. My target price is Rs 55-60 rupees and stop loss is at Rs 37.

On how HNI clients are thinking
Rahul Sharma: The markets have already been overstretched and standing at a junction where anything can happen on either side. The HNIs are shifting the whole portfolio to the undervalued segment varying from midcap to small caps and large caps. We are bullish in the long term but in the short term, we can see a sharp correction coming in the market which will be treated as a very healthy correction.