Indian equity markets remained range-bound and volatile throughout the week, weighed down by muted global cues and the absence of strong domestic triggers. With no clear buying or selling momentum, investors have adopted a cautious stance, focusing increasingly on stock-specific opportunities rather than broad market moves.
In such an environment, selective buying in fundamentally strong stocks that have seen valuation corrections is emerging as a preferred strategy.
Selective Buying Opportunity
Market expert Sandeep Jain believes that despite the choppy market conditions, opportunities still exist in select stocks where fundamentals remain intact and risk-reward has improved. One such stock is India Nippon Electricals, on which Jain has once again turned positive.
Notably, this marks the third time Jain has recommended the stock.
Why India Nippon Electricals?
India Nippon Electricals had earlier traded near the ₹1,100 level but has since corrected sharply to around ₹806. According to Jain, this correction has significantly improved the stock’s risk-reward profile, making it attractive for both short-term and long-term investors.
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Share Price Target and Strategy
- Buy Price: Around ₹795
- Target Price: ₹930
From a technical perspective, the stock is currently trading close to its 200-day moving average, a key long-term support level. Jain highlighted that this positioning limits downside risk in the near term while offering upside potential if sentiment improves.
Strong Business Outlook Supported by Demand Recovery
India Nippon Electricals is a leading manufacturer of ignition systems for two-wheelers and three-wheelers. Jain pointed out that improving demand in the two-wheeler segment—supported by the recent GST reduction—could drive volume growth.
In addition, the company has a presence in export markets, which adds diversification to its revenue stream and provides some insulation against domestic demand fluctuations.
Financial Performance Boosts Confidence
The company delivered a healthy performance in the September quarter, strengthening confidence in its earnings outlook. Net profit for the quarter rose to ₹23 crore, compared with ₹21 crore in the same period last year.
Over the past three years, India Nippon Electricals has recorded profit growth of approximately 27%, reflecting consistent operational execution.
Valuation and Shareholding
- P/E Ratio: ~20x earnings
- Dividend Yield: ~1.5%
Founded in 1986, the company has a long operating history and is backed by a strong promoter group. Institutional shareholding remains relatively limited, both from domestic and foreign investors—something that could act as a re-rating trigger if earnings momentum continues.
Outlook
Given its proximity to key technical support levels, improving demand conditions in the auto segment, and steady financial performance, Sandeep Jain believes India Nippon Electricals is well-positioned to deliver stable returns, even if broader markets remain range-bound in the near term.
