Hindustan Motors Locked at Upper Circuit – Multibagger Stock in 4 Months

The calendar year 2024 has been a roller coaster ride for the stock market. Market participants have faced uncertainties due to a mix of potential rate cuts and geopolitical issues. However, a resilient domestic economy has kept investor morale high. As a result, the NSE benchmark Nifty 50 index is up about 4.83% and reached a fresh all-time high on Friday.

Hindustan Motors: A Stock to Watch

Amidst this backdrop, one under-the-radar stock is starting to gain attention: Hindustan Motors Ltd. On Friday, the stock hit the upper circuit limit of 5% on the NSE, and so far in 2024, it has surged by over 100%, delivering multibagger returns. Despite this impressive performance, the company reported an operating loss of over Rs. 5 crore in FY23.

A Look at Hindustan Motors’ History and Operations

Hindustan Motors Limited has a rich history, established during the pre-Independence era in Port Okha, Gujarat. In 1948, the company moved its operations to Uttarpara in the Hooghly district of West Bengal, where it began producing the iconic Ambassador. The company has integrated facilities, including a press shop, forge shop, foundry, machine shop, aggregate assembly units for engines and axles, and a strong R&D wing. Hindustan Motors currently manufactures the Ambassador (with 1500 and 2000 cc diesel, 1800 cc petrol, CNG, and LPG variants) in the passenger car segment. It also produces the 1-tonne payload mini-truck Winner (2000 cc diesel and CNG) at its Uttarpara and Pithampur plants.

Technical Analysis: A Strong Uptrend

Technically, Hindustan Motors has experienced a multi-year breakout, supported by robust volume and trading activity, indicating broader market participation. The stock is in a clear uptrend, and the strength of the trend is exceptionally high. The Average Directional Index (ADX), which measures trend strength, is 47.82 on a daily chart and 34.82 on a weekly chart—values above 25 are generally considered strong trends. In both timeframes, the stock meets this criterion, with the +DI above the -DI and trending higher in both charts. This suggests a strong and consistent upward trajectory for Hindustan Motors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.