Top Stock Picks: NCC (NCC) and Allsec Technologies (ALLSEC) Recommended by HDFC Securities for Strong Fundamentals

<ul>
  <li>The Indian stock market indices, Sensex and Nifty 50, are trading flat with a negative bias on Tuesday dragged by selling in banks, realty, and energy stocks.</li>
  <li>Broader markets underperformed the frontliners as the midcap and smallcap indices were down more than half a percent each.</li>
  <li>The benchmark Nifty 50 hit a fresh record high of 23,110 on Monday and witnessed profit booking at the peak level. Investors’ sentiment remains cautious ahead of the Lok Sabha election results scheduled to be announced next week.</li>
</ul>
<p><strong>Stay updated with the latest movements in the Indian stock market and insights on key stocks to watch.</strong></p>
<h2><strong>Market Overview: Sensex and Nifty 50 Performance</strong></h2>
<p>The Indian stock market indices, Sensex and Nifty 50, are experiencing a flat trading session with a slight negative bias. This downturn is primarily driven by selling pressures in the banking, realty, and energy sectors. Broader market indices, including midcap and smallcap, have also underperformed, each declining by more than half a percent.</p>
<h3><strong>Record High and Profit Booking</strong></h3>
<p>On Monday, the benchmark Nifty 50 reached a new record high of 23,110. However, this peak was followed by significant profit booking, reflecting cautious investor sentiment. The upcoming Lok Sabha election results, set to be announced next week, have added to the market's cautious outlook.</p>
<h2><strong>Stock Recommendations by HDFC Securities</strong></h2>
<p>HDFC Securities has put forward two fundamental stock picks: NCC and Allsec Technologies. The brokerage firm suggests buying these stocks at current market prices and adding more on dips for a holding period of two to three quarters.</p>
<h3><strong>NCC: Buy Recommendation</strong></h3>
<p>NCC boasts a diversified order book, robust execution capabilities, and a strong focus on debt reduction and working capital improvement. The company’s management has provided a revenue growth guidance of approximately 15%+ for FY25, driven by the upcoming elections. Additionally, the softening of raw material prices is expected to enhance margins. NCC anticipates an EBITDA margin in the range of 9.5% to 10%.</p>
<p>The current order book includes more projects with escalation clauses, which protect against input price increases. Given the all-time high order book, execution ramp-up, and a strong balance sheet, HDFC Securities has revised its estimates for FY25/26. The firm expects NCC's Revenue, EBITDA, and PAT to grow at a CAGR of 14%, 19.2%, and 32.4% respectively over FY24-26E.</p>
<p>HDFC Securities believes the base case fair value of NCC stock is ₹306, with a bull case fair value of ₹326 over the next two to three quarters. Investors are advised to buy NCC shares in the ₹275 - 280 range and add more on dips to the ₹245 - 250 range.</p>
<h3><strong>Allsec Technologies: Buy Recommendation</strong></h3>
<p>HDFC Securities is optimistic about Allsec Technologies, citing expected acceleration in revenue growth, stable margins, consistent execution, and strong cash generation as key factors supporting the stock's valuation.</p>
<p>Investors can buy Allsec Technologies shares in the ₹1,043 - 1,065 range and add on dips in the ₹937 - 955 range. The brokerage firm believes the base case fair value of Allsec Technologies stock is ₹1,162, with a bull case fair value of ₹1,261 over the next two to three quarters.</p>
<h3><strong>Conclusion</strong></h3>
<p>The Indian stock market is currently navigating a period of cautious sentiment, influenced by profit booking and upcoming election results. HDFC Securities' recommendations of NCC and Allsec Technologies offer potential investment opportunities with robust growth prospects. Investors are advised to consider these picks within the recommended price bands and holding periods for optimal returns.</p>