1 week Ago
Stocks to buy: After a modest 9 per cent return last year, experts caution investors to temper their market expectations this year. Key factors like the trajectory of US interest rates , Donald Trump's trade policies, and the recovery in corporate earnings are expected to create a volatile market environment. Some experts see the possibility of a 5-10 per cent correction in the frontline indices in the first half of the calendar year 2025.
"We might see some more weakness in the Indian stock market. Indian companies' earnings were definitely disappointing last quarter, so the Nifty may come down by another 5-10 per cent in the first half. Recovery will start only from July onwards," CA Rudra Murthy B.
V., the founder director of Vachana Investments, told in an exclusive interaction with Mint . While the outlook for the broader market remains hazy, experts see no dearth of stock-specific opportunities.
Top brokerage firms such as JM Financial, Axis Securities, and Emkay Global have initiated coverage on stocks across various sectors. Here’s a look at five stocks they believe offer strong upside potential. Varun Beverages Brokerage firm JM Financial has initiated coverage on the Varun Beverages stock with a buy rating.
It has fixed the target price for the stock at ₹ 725, implying an upside potential of 12 per cent. JM Financial underscored that Varun Beverages' track record highlights its ability to drive high growth, which makes it the franchisee of choice for Pepsico in India and Africa. "We see more legs to the growth story with (a) penetration and portfolio play (NCB/energy drinks/ value-added dairy beverages) led growth in an already formidable India business, and (b) market share gain+ penetration + margin improvement headroom in the Africa business," said JM Financial.
"A well-demonstrated track record, large opportunity on offer, faster growth versus peers and a debt-free balance sheet provides confidence on the earnings growth and RoCE profile and justifies premium valuations. We initiate with a buy rating and target price of ₹ 725, based on 55 times December 2026 EPS," the brokerage firm said. JM Financial, however, added that the better-than-expected scale-up in Africa is a key upside risk, while any irrational competitive activity or adverse seasonality is a downside risk.
Tata Technologies Brokerage firm Chola Securities has initiated coverage on Tata Technologies with a target price of ₹ 1082, implying an upside potential of nearly 22 per cent. The investment horizon is 15-18 months. The brokerage firm believes Tata Technologies' earnings will grow at a CAGR of nearly 13.
5 per cent from FY24 to FY27E. It said operating margins may stay stable at around 18.50 per cent, while return ratios like ROE and ROCE may improve by 20 and 60 bps, respectively.
Large tailwinds from the BMW and Agratas tie-ups are expected to materialise from FY26E. Based on FY27e (earnings per share estimates), the stock is available at a PER (price-to-earnings ratio) of nearly 36 times. Chola Securities said the average trading PER multiple of the peer group is around 55/56 times on a trailing twelve-month basis.
Kalpataru Projects International Axis Securities has initiated coverage on the Kalpataru Projects International stock with a buy recommendation, pegging the target price at ₹ 1,590, implying an upside potential of 25 per cent. "The company is expected to benefit from a strong order book, favourable sectoral tailwinds in both domestic and international T&D and B&F segments, improved performance of international subsidiaries, supportive government initiatives, and anticipated margin enhancements," said Axis Securities. "We assign a target P/E (price-to-earnings) multiple of 22.
5 times on our FY27 EPS (earnings per share) estimate to arrive at our target price of ₹ 1,590 and initiate coverage with a buy rating," said the brokerage firm. PFC and REC Brokerage firm Emkay Global Financial Services has initiated coverage on PFC and REC with a buy recommendation. "We project nearly 13 per cent and 18 per cent AUM CAGR for PFC and REC, respectively, over FY24-27E, along with nearly 19 per cent and 20 per cent ROE during FY25-27E, respectively, driven by robust credit demand, write-backs, and net credit cost of -5bps to 5bps over FY25-27E," said Emkay.
"We initiate coverage on PFC and REC with buy and Dec-25E target price of ₹ 600 and ₹ 650 (31 per cent and 25 per cent upside), respectively), valuing REC at FY26E P/BV (price-to-book-value) of 1.9 times, and PFC at FY26E standalone P/BV of 1.5 times and 25 per cent holding company discount on its REC stake," Emkay said.
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