After experiencing six consecutive days of declines, the Indian stock market has shown signs of recovery, attracting buying interest at lower levels. Servotech Power shares, which opened lower at ₹164 on the NSE and hit an intraday low, attracted significant buying activity during this relief rally.
Within minutes of the Opening Bell, the stock price rebounded, reaching an intraday high of ₹178.95, marking a remarkable increase of nearly 7% from its earlier low. Experts are optimistic about further potential gains for this small-cap stock, particularly due to the recent order received from the Nashik Municipal Corporation.
Factors driving the surge in Servotech Power shares
Several triggers have contributed to the rebound of Servotech Power’s stock. Anshul Jain, Head of Research at Lakshmishree Investment and Securities, indicated that the immediate catalyst for this surge was a new order from the Nashik Municipal Corporation.
He noted that there is already significant excitement surrounding the electric vehicle (EV) sector, leading medium- to long-term investors to actively invest in IPOs related to this market. As a result, interest in Servotech Power shares has intensified, reflecting confidence in the company's future growth prospects.
Technical analysis and future projections
From a technical perspective, Servotech Power has demonstrated a fresh breakout at ₹178. Analysts predict that the stock could reach a price range of ₹200 to ₹210 in the short term. Jain advised new investors to consider buying this stock while maintaining a stop-loss order at ₹165.
Current shareholders should also hold onto their investments, keeping the same stop-loss to mitigate potential losses. This strategy aims to capitalise on the stock's upward momentum, which could be bolstered by positive market conditions.
Buy-on-dips strategy recommended
Sumeet Bagadia, Executive Director at Choice Broking, has also weighed in, recommending a buy-on-dips approach. He suggested that existing shareholders could adopt this strategy while keeping a stop-loss at ₹150.
He encouraged new investors to invest in IPOs of promising stocks like Servotech Power while emphasising the importance of adding to their positions during significant dips. The target for short-term gains has been set at ₹200, making this a strategic opportunity for those looking to capitalise on price fluctuations.
Recent developments in Servotech Power Systems
Servotech Power Systems Ltd recently announced to Indian exchanges that it has secured an additional order from the Nashik Municipal Corporation (NMC). This order builds on a previous contract for the supply, commissioning, and construction of 20 EV charging stations in the NMC area.
Due to the successful execution and timely delivery of the first order, NMC has entrusted Servotech with a new project that includes supplying and constructing 29 additional EV charging stations. This development highlights the growing demand for electric vehicle infrastructure and Servotech's pivotal role in meeting that demand.
A strategic time to invest in Servotech Power
In conclusion, the recent surge in Servotech Power shares is indicative of the stock's potential within the expanding EV market. With a favourable technical outlook and the backing of new orders, there are promising opportunities for investors.
For those considering options in the small-cap segment, now might be an excellent time to invest in IPOs like Servotech Power, especially as the market stabilises and shows signs of recovery. This could lead to significant returns in the near future, making Servotech a stock worth watching for both current and prospective investors.
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