Mphasis - Start Accumulating Target 2187 and 2424Mphasis completed its cycle wave on Apr 17, 2023 with double bottom and bullish hammer. The rally following this completed wave (i) of its new primary wave 1. Today the stock touched low of 1843 marking 50% retracement with completion of intended wave structure and an exhaustion gap on June 6, 2023.
Post this, the powerful wave 3 should begin. Though the wave (ii) structure is completed, with upward bias, every fall hereafter, if at all, would be a perfect opportunity to accumulate. Stock should ideally have fallen to 1803, if it fails to fall further, upward bias will be confirmed.
Targets 2180, 2414 in short to medium term. I am opening long with 6-12 months target.
Alternative confirmations :
1. June 23 Call OI max at 2000, next highest, almost half of 2000 OI, at 1900. Puts highest OI at 1800
2. P/E Ratio of 21, RoCE 30%, RoE 20%. PEG 1.47 (high in ind). 5 Yr. CAGR : Revenue 15.8%, EBITDA 16.2%, PAT/EPS 14.4%. Interest expenses negligible (low gearing). Dividend yield 2.6 (lower than ind but higher than Nifty 50).
3. P/E not higher than that of Industry. P/B superior to comparable peers. Profit growth superior to much larger players.
4. Institutions holding 38.7%, and FIIs 17.7%.
5. No major chunks of disposal by insiders (employees, of ESOP) is noticed.
6. Median deliverable volumes seem to be 40%+, not indicating only speculative counter.
7. Covered by quality research firms - 17 reports, 8 analysts with avg. target 2200 - covered by BoB, ICICI, HDFC. 4 Buy, 4 Neutral, 0 Sells, 1 upgrade.
8. July and Aug. Futures at normal premium.
Concerns:
1. High beta, 1.33.
2. FIIs pared stake by 1.17% in current quarter (seems profit booking, domestic MFs raised 0.55%)
3. June Futures small negative basis.
Overall, the stock is in the perfect buy zone, to start accumulating. I have opened fresh long positions.
Disclaimer : The contents herein are my personal views, with an objective of seeking views and comments from traders community at TV. Nothing contained herein should be construed as an advice, offer, inducement or encouragement to buy or sell any shares, security, derivatives linked to the security, debt security or any other security of the company mentioned herein. The readers must make their independent assessment and evaluation of the company and its securities, and should take advice from their financial advisors before entering into making any financial decision, without relying on anything contained hereinabove, or views given as addendum or comments hereafter. The author shall not be responsbile or liable, directly or indirectly, for any loss or damage caused to the reader, or any other person or third party, whether pecuniary or otherwise, whether in present or in future.
