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L&T, IRB Infra: Can National Monetisation Pipeline boost infra stocks?

Infrastructure and capital goods-related stocks witnessed buying in Tuesday's trade after the Finance Minister launched Rs 6 lakh crore asset monetisation plan on Monday, with an aim to fund the infrastructure projects over four years. "For the government, the pipeline should provide enough time to complete the administrative groundwork necessary in advance to make the national monetisation policy (NMP) a success," wrote Sonal Varma, Nomura's chief economist for India and Asia ex-Japan in a coauthored note with Aurodeep Nandi. The success of the NMP, analyst.....
Infrastructure and capital goods-related stocks witnessed buying in Tuesday's trade after the Finance Minister launched Rs 6 lakh crore asset monetisation plan on Monday, with an aim to fund the infrastructure projects over four years.

"For the government, the pipeline should provide enough time to complete the administrative groundwork necessary in advance to make the national monetisation policy (NMP) a success," wrote Sonal Varma, Nomura's chief economist for India and Asia ex-Japan in a coauthored note with Aurodeep Nandi.

The success of the NMP, analysts say, will come down to its implementation. A key risk in the brownfield project, according to Nomura, is the volume of traffic. 

"The appetite of the private sector will also depend on other factors like the duration of the concessions, institutional mechanism for dispute resolution, ability to operate the projects at commercial rates, regulatory and taxation issues, among others," Varma and Nandi said.

Following this development, shares of IRB Infrastructure Developers jumped over 5 per cent, GMR Infrastructure added 2 per cent and Larsen & Toubro Ltd (LT) recovered following five days of bear hammering in the stock.

Here's a look at what the road ahead looks like for some of these companies on tech charts:

Larsen & Toubro Ltd (LT)
Likely target: Rs 1,750 and Rs 2,000
Upside potential: 10% to 25%

Shares of Larsen & Turbo did not witness any follow-up momentum after conquering the weekly hurdle of Rs 1,600 level. However, the medium-term trend remains highly bullish with a "Golden Cross" formation that hints at a possible rally towards Rs 2,000. An immediate rally towards Rs 1,750 levels can also be expected. The overall trend has support at Rs 1,450 mark, as per the weekly chart. CLICK HERE FOR THE CHART

IRB Infrastructure Developers Ltd (IRB)
Outlook: Needs to hold Rs 150 levels.

The stock of IRB Infra looks bearish on charts, with the formation of a "Head and Shoulder" pattern. However, weak volume activity on the downside doesn't support the bearishness. Further, as long as the breakdown neckline of Rs 150 is defended, the reversal can see an aggressive upside. A major positive breakout to Rs 186 is also likely if the stock conquers Rs 175 levels. CLICK HERE FOR THE CHART

GMR Infrastructure Limited (GMRINFRA)
Outlook: Breakout may result in a rally of over 15 per cent

Shares of GMR Infrastructure are trading between 50-days moving average (DMA) and 100-DMA, according to the daily charts. The 50-DMA is located at Rs 29.80 levels, which is acting as a resistance, whereas Rs 27.25 levels, which is the 100-DMA, is firmly providing support on any decline. Breakout on either side may result in over 15 per cent move on either side, as per the range-bound pattern. CLICK HERE FOR THE CHART

DLF Ltd (DLF)
Likely target: Rs 325 and Rs 340
Upside potential: 6% to 10%

As long as the support of the 200-days moving average (DMA) is upheld, currently placed at Rs 273 levels, the stock is expected to witness a positive bias from a medium-term perspective. The immediate support comes at Rs 292 mark, which is its 100-DMA. The reversal has a resistance at the Rs 325 and Rs 340 levels, which needs to be aggressively crossed for the stock to rally towards Rs 375 levels. CLICK HERE FOR THE CHART

Adani Ports and Special Economic Zone Ltd (ADANIPORTS)
Outlook: Needs to defend 200-DMA

Until the resistance of Rs 750 is conquered, the stock will likely trade with a negative bias, as per the daily chart. That said, if the 200-DMA, placed at Rs 637, is held decisively then the reversal may see addition in volumes to cross the resistance. The current price levels are trading below 50-DMA and 100-DMA suggestive of weakness and a downward sentiment. CLICK HERE FOR THE CHART


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