In his latest weekly recommendations, Sumeet Bagadia has pointed out a trio of stocks priced under ₹100 which he believes offer short-term potential, provided key conditions hold. According to his analysis, the broader market remains “cautiously constructive” and the way ahead is by focusing on stock-specific opportunities rather than broad index plays.
The three stocks he recommends for the upcoming Monday are:
- Coastal Corporation – Buy at ₹45.94, Target ~ ₹49.50, Stop-loss ~ ₹44.25
- Malu Paper Mills – Buy at ₹41.48, Target ~ ₹44.50, Stop-loss ~ ₹39.90
- Global Education – Buy at ~₹80, Target ~ ₹86, Stop-loss ~ ₹77
Below we analyse each pick in more depth, the rationale behind each, and also highlight the risks and considerations for investors.
Coastal Corporation
Entry: ₹45.94 | Target: ₹49.50 | Stop-Loss: ₹44.25
Bagadia includes Coastal Corporation in his list noting that the stock offers upside potential from its current level of just ~₹46. His technical set-up suggests a favourable reward-risk (target vs stop-loss) in a low‐price stock that may respond to upside momentum.
Rationale:
- With a low base price (~₹45), the stock has more “room” to move compared to higher-priced shares, which can attract speculative flows.
- The recommended stop-loss at ~₹44.25 indicates Bagadia expects minimal downside before the stock can attempt to move upward toward his target.
- The modest target of ~₹49.50 suggests he expects only a moderate uplift rather than explosive gains, but in the context of a sub-₹100 stock, a move of ~8-10% is still significant.
Considerations & Risks:
- Stocks trading at low prices under ₹100 often carry higher risk: lower liquidity, higher volatility, and sometimes weaker corporate fundamentals.
- Technical support is near the stop-loss, so if the market turns negative, the risk of hit to stop-loss is non-trivial.
- Investors should check corporate fundamentals of Coastal Corporation (financials, debt, business outlook) as low-price stocks may be prone to downside surprises.
Malu Paper Mills
Entry: ₹41.48 | Target: ₹44.50 | Stop-Loss: ₹39.90
Malu Paper Mills is the second recommendation, again priced below ₹50, with a moderate target and a tight stop-loss window. Bagadia’s thrust here appears to focus on tactical short‐term opportunity rather than long‐term structural turnaround.
Rationale:
- The entry price is ~₹41.50, stop-loss ~₹39.90, giving a risk window of ~3.8%. The target of ~₹44.50 implies upside of roughly 7%. The risk-reward here is around 1:2, which is acceptable for short‐term trade.
- A sub-₹50 stock with such a defined risk-reward window can appeal to traders looking for quick moves in volatile conditions.
- The choice aligns with Bagadia’s overall theme: in a market that is range‐bound (his view of the index support/resistance), picking stocks showing strength on technical charts is preferable.
Considerations & Risks:
- Paper‐mills and similar commodity/industrial firms often face cyclical pressures (raw material inflation, demand slowdowns, margin squeezes). Investors in Malu Paper Mills must be comfortable with such risks.
- Lower capitalisation stocks under ₹50 often have limited analyst coverage, which can mean less publicly‐available information and higher uncertainty.
- Given the tight stop-loss, the margin of error is slim: a small adverse move may trigger the stop-loss quickly.
Global Educatio
Entry: ~₹80 | Target: ~₹86 | Stop-Loss: ₹77
Global Education is the most expensive among Bagadia’s three picks (albeit still under the broader “small‐cap/low price stock” category by Indian standards). With an entry around ₹80 and target ~₹86, Bagadia estimates roughly 7.5% potential upside. The stop-loss of ₹77 indicates relatively tight downside protection.
Rationale:
- In the education sector, companies can sometimes benefit from structural trends (demographics, private‐education spending). If Global Education is in a favourable niche, this could add to its appeal.
- The higher entry price relative to the other two picks gives potentially higher liquidity and less extreme volatility.
- Bagadia’s approach emphasises “stock‐specific strength” in a market that may not deliver broad‐based gains, so this pick may reflect a view that Global Education has chart or fundamental triggers in place.
Considerations & Risks:
- The education sector is sensitive to regulatory changes, changes in enrollment trends, and macroeconomic factors (consumer spending).
- A target of ~₹86 from ₹80 offers modest upside, and given the risk of underperformance in low‐cap stocks, the return may not fully compensate unless there is a catalyst.
- Investors must check the company’s financial health, growth prospects, and competitive positioning before committing, as low‐priced stocks can be more speculative.
Why Bagadia is Using this Approach
Bagadia’s current strategy, as per his commentary, is to focus on stocks showing strength while being selective. He notes that the broad market—represented by the Nifty 50 index—has established strong support near ~25,800 and is facing resistance near ~26,200. A breakout above ~26,300 could lead to ~26,700, while a breakdown would raise caution.
In such a scenario—where the overall market is somewhat range‐bound—he recommends concentrating on individual stocks rather than making broad index bets. The rationale is that in a constrained market, real returns will come from stock‐specific triggers and chart setups rather than broad bullish momentum. This justifies his selection of low‐priced stocks with defined entry, target and stop-loss levels.
Moreover, low‐priced stocks under ₹100 have psychological appeal for retail investors—they appear accessible and the upside seems “achievable”. Bagadia’s approach uses this to identify potential opportunities while still maintaining risk discipline (via stop-losses). The modest targets reflect realism given the broader market conditions.
Key Takeaways for Investor
- Risk-Reward Discipline
For each of the three stocks, the entry and stop‐loss levels are clearly defined. This is important: low‐priced stocks can be volatile, so limiting downside is essential. - Stock-Specific Focus in a Range-Bound Market
Since Bagadia anticipates the broader market may not deliver major upside unless key levels are breached, the focus shifts to stocks with favourable technicals or specific catalysts. - Use of Tight Stop-Losses
In all three cases, the stop-loss levels are only marginally below the entry price. This indicates a disciplined approach—limiting losses, even if the upside is not huge. - Modest Upside Targets
The targets (~7-10%) reflect modest expectations rather than bets on massive rallies. Investors should moderate expectations accordingly. - Due Diligence Required
Buying low-priced stocks does not eliminate risks. Investors should still check fundamentals: financial health, promoter track record, liquidity, sector trends, and regulatory environment. - Liquidity & Volatility Considerations
Stocks under ₹100 often have lower trading volumes and are more sensitive to news or sentiment shifts. This can mean larger swings (both up and down). - Time Horizon
These recommendations appear oriented toward short to medium‐term opportunity (rather than long‐term holds). Investors with longer horizons should decide whether these companies fit their strategy or whether they prefer stocks with more established track records.
Final Thoughts
Sumeet Bagadia’s three picks—Coastal Corporation, Malu Paper Mills and Global Education—provide a blueprint for how to approach small‐cap/low‐price stocks in the current market. The formula: identify stocks under ₹100, look for favourable chart setups, define entry/target/stop‐loss, and keep expectations modest.
That said, the very nature of low‐priced stocks means investors should proceed with caution. These opportunities may offer higher percentage upside than larger caps, but they also carry higher risk of underperformance or sharp drops. The broader market backdrop—characterised by range‐bound behaviour and sensitivity to global cues—adds further caution.
If the entry levels are respected and stop-losses are adhered to, these stocks could deliver returns in the ~7-10% range over the near term. However, investors should also be prepared for scenarios where the stop-loss is triggered and exit the position promptly rather than hold onto hope.
In a market where broad rallies may be harder to come by, Bagadia’s approach emphasises selectivity, discipline and realistic targets. For retail investors comfortable with risk, these under-₹100 picks might be worthy of consideration—but only as part of a diversified portfolio and not as speculative bets without guardrails.
Disclaimer: These views reflect the recommendation of the analyst mentioned and are for informational purposes only—not a personal investment recommendation. Investors should consult their financial advisor, conduct independent research, and consider their risk tolerance before investing.