Stock Under Rs. 50: Coming Out of BIG Base with HIGH Upside!

  • Stock Market Analysis

One of the lesser-known stocks that caught my attention in today’s bullish market environment is Bharat Road Network Ltd (NS: BHRN ). It is engaged in the business of developing and maintaining road/highway projects in the country and has a market capitalization of INR 351 crore.

When looking at the monthly chart, the stock is making a strong reversal amid a beautiful rounding bottom formation. It is a bullish reversal pattern and generally forms on a longer time frame, making it a more prominent reversal pattern than other short-term ones.

Image Description: Monthly chart of Bharat Road Networks

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The stock came crashing down from INR 220 odd levels and is now down to the CMP of INR 47. This not only gives a huge upside potential, technically but also minimizes the downside risk.

Image Source: InvestingPro+

So, what should be the ideal level to eye for? Looking solely at the chart, the next resistance is around INR 54 - 56m which is around the peaks of monthly candles in early 2020. Now, on the fundamental side, the average fair value also conforms to the technical level, which is INR 55.5, depicting a good 16% - 20% upside.

However, the highest intrinsic value, as per the 5-year DCF EBIDTA exit model is around INR 78 which doesn’t seem an uphill task for the stock. As the momentum is hot in the Indian markets, this could be one of the very few low-risk-high-reward stocks investors can have a look at.


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