MarketSmith's Raja Venkatraman Identifies Five Top Stocks for June 4

Indian Equity Benchmarks Recover from Day's Lows

On Wednesday, 3 June, Indian equity benchmarks recovered from their day's lows after reports suggested the government may consider measures to support the rupee, encourage foreign investment into the bond market, and review the long-term capital gains (LTCG) tax framework. Despite the recovery, markets ended lower due to rising crude oil prices and profit-booking in information technology stocks.

The Nifty 50 closed 0.33% lower at 23,405.60, while the BSE Sensex declined 0.41% to 74,346.17. Both indices had fallen nearly 1.5% during intraday trade before trimming losses. IT stocks came under pressure after a recent rally, while concerns over elevated oil prices continued to dampen risk appetite.

Brent crude oil climbed around 3% to nearly $99 per barrel, as tensions in the Gulf intensified and diplomatic efforts between Washington and Tehran showed limited progress. Foreign investors have remained cautious on Indian equities, pulling out a record $26.8 billion so far this year. Analysts attribute the outflows partly to India's relatively limited exposure to direct beneficiaries of the global artificial intelligence boom, alongside concerns over higher energy prices.

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Comparison of Indian Equity Benchmarks

The latest decline marks the fifth loss in the past six trading sessions for domestic benchmarks, underscoring the impact of geopolitical uncertainty and persistent foreign selling on market sentiment. Higher crude prices remain a key concern for India, as they can widen the current account deficit, stoke inflationary pressures, and weigh on economic growth.

Stocks to Buy

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Raja Venkatraman, Co-founder of NeoTrader, and stock research platform MarketSmith India, recommended buying the following five shares:

Laxmi Organic Industries Ltd

• Current market price: ₹164.55
• Why it's recommended: Laxmi Organic Industries Ltd is a prominent Indian specialty chemicals manufacturer, supplying essential raw materials to the pharmaceutical, agrochemical, and packaging industries across more than 30 countries.
• Key metrics:
  • P/E: 57.71
  • 52-week high: ₹240.60
  • Volume: 46.59M
• Technical analysis: Support at ₹150, resistance at ₹195
• Risk factors: Raw material price volatility, reliance on a single manufacturing hub, geopolitical and logistics disruptions, and heavy shareholder dilution.
• Buy: above ₹165
• Stop loss: ₹155
• Target price: ₹189 (2 Months)

IIFL Finance Ltd

• Current market price: ₹498.80
• Why it's recommended: IIFL Ltd is one of India's leading diversified non-banking financial companies (NBFCs), focusing on gold loans, home loans, microfinance, and corporate MSME lending.
• Key metrics:
  • P/E: 18.36
  • 52-week high: ₹674.95
  • Volume: 6.96M
• Technical analysis: Support at ₹430, resistance at ₹600
• Risk factors: Regulatory compliance, asset quality in unsecured loans, and liquidity constraints.
• Buy: above ₹500
• Stop loss: ₹478
• Target price: ₹550 (2 Months)

Jindal Saw Ltd

• Current market price: ₹250.85
• Why it's recommended: Jindal SAW Ltd is a leading global manufacturer and supplier of iron and steel pipe products and pellets.
• Key metrics:
  • P/E: 20.42
  • 52-week high: ₹260.20
  • Volume: 4.14M
• Technical analysis: Support at ₹230, resistance at ₹290
• Risk factors: High commodity price volatility for raw materials like scrap iron and coal, and execution risks tied to government water contracts.
• Buy: above ₹253
• Stop loss: ₹240
• Target price: ₹280 (2 Months)

The Federal Bank Ltd

• Current price: ₹301
• Why it's recommended: Strong retail-focused banking franchise, consistent asset quality performance, healthy CASA base, well-diversified loan portfolio, strong presence in South India, improving digital banking capabilities, stable deposit growth, healthy capital adequacy, strong risk management practices, consistent profitability track record, growing retail and SME lending, improving operational efficiency, strong NRI customer franchise, attractive valuation versus peers, and healthy return ratios.
• Key metrics:
  • P/E: 16.12
  • 52-week high: ₹302.85
  • Volume: ₹474.34
• Technical analysis: Trendline Breakout
• Risk factors: Intense competition from private banks, interest rate cycle impact, margin pressure from deposit costs, economic slowdown affecting credit growth, rising NPAs during weak cycles, geographic concentration risk, CASA growth challenges, regulatory compliance risks, competition for low-cost deposits, credit cost volatility, dependence on regional economic activity, technology and cybersecurity risks, slower loan growth risk, talent retention challenges, and valuation re-rating may be gradual.
• Buy: ₹298–303
• Target price: ₹346 in two to three months
• Stop loss: ₹285

Fiem Industries Ltd

• Current price: ₹2,347
• Why it's recommended: Strong presence in automotive lighting, leading supplier to major OEMs, beneficiary of premiumization trend, growing demand for LED lighting, strong relationship with two-wheeler OEMs, established manufacturing capabilities, focus on technology-driven products, export growth opportunities, healthy balance sheet, consistent profitability track record, beneficiary of EV adoption, increasing content per vehicle, capacity expansion opportunities, strong niche positioning in lighting, and improving operational efficiencies.
• Key metrics:
  • P/E: 23.41
  • 52-week high: ₹2,555.30
  • Volume: ₹44.11 crore
• Technical analysis: Cup-with-handle base breakout
• Risk factors: Dependence on auto industry cycle, high exposure to two-wheeler segment, customer concentration risk, slowdown in vehicle sales, raw material price volatility, margin pressure from OEM pricing, intense competition in auto ancillaries, EV technology transition risks, supply chain disruptions, dependence on key OEM relationships, working capital requirement risk, export demand fluctuations, technology obsolescence risk, economic slowdown affecting demand, and valuation risk during auto downturns.
• Buy at: ₹2,324–2,359
• Target price: ₹2,700 in two to three months
• Stop loss: ₹2,200