Top Trending stock on Budget Day: Aavas Financiers

The growth-oriented union budget 2022-23 has favoured the stock as it zoomed over 5% and hit a fresh all-time high of Rs 3079.

Aavas Financiers is a housing finance company, engaged in providing home loans to customers belonging to low and middle-income segments in semi-urban and rural areas. It is a midcap company with a market capitalization of Rs 24230 crore. The company has posted strong financial numbers in the last four years and have recorded double-digit growth.

In the past month, the stock has gained over 16% and is in a strong uptrend. Last year, the stock delivered about 60% returns to its shareholders and has outperformed the sector and most of its peers.

The growth-oriented budget has favoured the stock as it zoomed over 5%. With this, the stock has hit a fresh all-time high of Rs 3079. The stock has moved in line with its 20-DMA and has shot up from there. This price action is supported by the huge volume recorded today which is about five times the previous day’s volume. Several technical parameters suggest bullish sentiment of the stock. The RSI has entered the bullish territory while the ADX has also risen above 23 indicating a strong uptrend. Moreover, the Elder Impulse System has given a fresh buy signal. All its moving averages are upward sloping, which highlights the strong uptrend of the stock in recent times. Moreover, the Mansfield Relative Strength index indicates outperformance of the stock against the broader market.

With such strong growth potential, the foreign investors hold a major stake of about 40% in the company. The Promotors hold about 39% stake, while the Domestic institutions hold about 10% stake. The remaining portion is held by the HNIs and public.

The budget favoured the MSMEs, and such a growth-oriented budget have bought a smile on the faces of Aavas’ shareholders. Considering the strong technical factors with rising volume, traders can include this stock in their portfolio. It has the potential to deliver decent profits in the short and well as medium term.