2 hrs ago
PL Capital names 14 high-conviction Indian stocks amid volatility
PL Capital is a brokerage that studies companies and suggests stocks it considers attractive.
It says Indian shares may remain bumpy because of tensions involving the United States and Iran, expensive oil and higher global borrowing costs.
The brokerage is still finding opportunities because India’s economy has remained resilient and recent company earnings were healthy.
It warns that higher material costs, weak monsoons and rising prices could hurt profits.
PL Capital increased its one-year target for the Nifty index to 27,123.
It highlighted five large companies and nine mid- and small-sized companies.
CESC had the biggest possible gain on the list, at 43.6%.
These are forecasts, not guarantees that the share prices will rise.
PL Capital expects near-term Indian market volatility because of geopolitical uncertainty, higher oil prices and rising global bond yields.
The brokerage raised its 12-month Nifty target to 27,123 from 27,019, while warning that projected 17.7% earnings growth may be at risk.
ICICI Bank has the highest large-cap upside potential at 29.4%, with a target price of ₹1,850.
CESC leads the mid- and small-cap list with 43.6% potential upside to a target price of ₹220.
PL Capital added Supreme Industries, Amber Enterprises India and Aster DM Quality Care to its conviction picks, while removing four other stocks.
- Who
- PL Capital, an Indian brokerage firm, and the companies included in its high-conviction stock list.
- What
- PL Capital published a revised list of five large-cap and nine mid- and small-cap stocks, along with target prices and potential upside estimates.
- Where
- The recommendations concern the Indian stock market.
- When
- The outlook was issued after the Nifty fell 1.2% in August; the brokerage provided a 12-month Nifty target.
- Why
- PL Capital cited stock-specific opportunities but also warned about geopolitical uncertainty, higher crude and commodity prices, deficient monsoons, rising essential-goods prices and possible pressure on earnings.
Potential opportunities
Market risks
Indian market outlook
Potential opportunities
India’s resilient economy, healthy Q1FY27 earnings and stock- and sector-specific opportunities support selected buying ideas.
Market risks
Geopolitical uncertainty, higher oil prices and rising global bond yields could keep the market volatile.
Corporate earnings
Potential opportunities
PL Capital projects 17.7% Nifty earnings-per-share growth and sees scope for selected companies to reach its target prices.
Market risks
The brokerage warned that higher raw-material costs, deficient monsoons, rising essential-goods prices and global commodity pressures could hurt demand and profits; it said the projected earnings growth is at risk.
Consumption stocks
Potential opportunities
PL Capital remains positive on Britannia Industries and Titan Company and continues to view them favorably.
Market risks
The brokerage said commodity inflation could pressure margins and that rich valuations, along with near-term profit headwinds at DOMS Industries, justified removing those stocks from the conviction list.
Key facts
- Nifty August performance
- The benchmark Nifty fell 1.2% in August, ending a two-month winning streak.
- Revised Nifty target
- PL Capital raised its 12-month Nifty target to 27,123 from 27,019.
- Nifty valuation
- The brokerage said Nifty was trading at 17.3 times one-year forward earnings per share.
- Large-cap list
- ICICI Bank, Bharti Airtel, Kotak Mahindra Bank, Shriram Finance and Larsen & Toubro.
- Highest large-cap upside
- ICICI Bank has a target price of ₹1,850 and potential upside of 29.4%.
- Highest mid- and small-cap upside
- CESC has a target price of ₹220 and potential upside of 43.6%.
- New conviction picks
- Supreme Industries, Amber Enterprises India and Aster DM Quality Care were added.
- Removed picks
- Britannia Industries, Titan Company, DOMS Industries and Rainbow Children’s Medicare were removed, although PL Capital remained positive on Britannia Industries and Titan Company.
Quotes
PL Capital
Brokerage firm providing market analysis and stock recommendations
“We are positive on Britannia Industries and Titan Company; however, given the expected impact of commodity inflation on margins and rich valuations, we are overweight on both. DOMS Industries will see near-term profit headwinds, and valuations will remain rich, given the gradual de- rating of the consumption space”
livemint.com
“We fear a risk to demand and corporate profit growth in the coming quarters driven by (1) higher raw material prices in Q2 and Q3, (2) deficient monsoons, (3) successive price hikes in essential goods, and (4) global spike in commodities and higher crude prices”
livemint.com
Sources
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