Budget 2023 is finally here and the enthusiasm among market participants is clearly seen via their buying interest in many counters. The benchmark Nifty 50 index is up 0.85% to 17,812, by 10:27 AM IST with all sectors trading in the green zone, except the Nifty Oil and Gas index, which is down 0.9%.
As there are huge expectations regarding the budget, many probable beneficiaries are gaining traction and Quess Corp Limited (NS:QUEC) is among them. The company provides business services across four segments - Industrial Asset Management Group, Global Technology Solutions Group, Integrated Facilities Management, and People & Services, having a market capitalization of INR 5,275 crores.
It is yet to declare its Q3 FY23 earnings report but the previous quarter wasn’t a good one, with the net income declining 37.09% QoQ to INR 42.06 crores, translating into an EPS (earnings per share) of INR 2.84, compared to INR 4.52 in the quarter ended June 2022. However, on a larger time frame, the company has been increasing its revenue at a 5-year CAGR of 26.06%, leading to a record revenue of INR 13,788.18 crores in FY22. The net income has grown at a yearly rate of 14.63% in the same period.
Image Description: Daily chart of Quess Corp with volume bars at the bottom
Image Source Investing.com
The share price of Quess Corp has delivered massive pain to investors as it tanked 50.42% in the last one year, marking a 52-week low of INR 351.4 in the previous session. This recent low denotes that the ongoing trend is still negative however, today, the stock surged 4.83% to INR 374.4 and is trying to break above the upper trendline of the Falling Wedge chart pattern. The high of the day is above this trendline but currently, the stock is trading below it on account of some selling pressure from the higher levels.
Therefore it becomes imperative to wait for closing above INR 377 in order to anticipate a trend reversal from these lower levels. As the stock is extremely oversold, the reversal from here could be sharp. Keeping a stop loss below INR 350, bulls can have a look at this mean reversion opportunity which can propel the stock to around INR 420 in the near future, giving a risk-to-reward ratio of 1:1.9.