Hindustan Construction Company (HCC) has performed largely in line with benchmark indices so far in 2021, but a sharp 28 per cent rally seen in the last month put the stock on buyers’ radar. 

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The stock went under some consolidation after hitting a 52-week high of Rs 16.33 on the BSE on July 6, 2021. But, the recent price action suggests that there is still ample room to be explored on the upside.

Shares of HCC with a market capitalization of Rs 1791 crore rallied from Rs 9.21 as on November 3 to Rs 11.84 recorded on December 3 that translates into an upside of over 28 per cent.

Apart from a sharp rise in price activity, there are early signs of a bullish pattern known as ‘Inverse Head and Shoulder’ forming on the weekly charts. The prices are now forming the right shoulder, suggest experts.

If the momentum continues, experts foresee a target closer to Rs 16.20-19.50 that translates into an upside of 36-65 per cent from Rs 11.84 recorded on December 3.

HCC is a pioneer in India’s infrastructure industry, having executed landmark projects that have defined the country’s progress since 1926.

This 95 plus-year-old construction company has executed some of the leading projects across the country; however, it has been under-rated most of the time.

In the last decade, the stock prices have seen many scenarios. For instance, after testing around the levels of Rs. 10, the stock has given an astonishing 5x to 6x returns within a period of a few months.

Now prices are back to the lower base and in the last few sessions, we have seen price and volume activity picking up indicating that the history is likely to repeat again.

“On the weekly chart, we are observing early signs of a bullish pattern known as ‘Inverse Head and Shoulder’ and the prices are now forming the right shoulder,” Rajesh Bhosale, Technical Analyst, Angel One Ltd, said.

“The volume characteristic is in line with the pattern formation where there is an increase in volume structure when prices are moving higher as compared to the volumes during the down move,” he said.

In the recent quarterly results, the company announced a comparatively good set of numbers and it has also grabbed a note-worthy orders in the last few months.

“Hence looking at all the above scenarios, we expect this small-cap to give splendid returns in the near term and hence we recommend a buy at current levels and on a dip to Rs. 11 for a target of Rs. 16.20 and 19.50. The stop loss can be placed at Rs. 8.80,” added Bhosale.

Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.