Nuvama has picked three stocks, Hindustan Unilever, Dr Lal Pathlabs, and IndiaMart, as potential Buys. The brokerage house expects an upside of up to 52% in one of the stocks. Here’s a detailed analysis of its recommendation-
Nuvama on HUL: Focus shifting to D2C and affordability
Nuvama has maintained its ‘Buy’ rating on Hindustan Unilever, with a target price of Rs 3,055. This is an upside of 33% over the next 12 months. HUL achieved a 200 basis points shift in portfolio mix to Future Core and Market Makers in FY25. HUL sharpened its focus on D2C, TAM expansion, digital and affordability in FY25. It boosted D2C presence after taking over Minimalist and increasing digital spends to 40%.
Nuvama expects growth of volumes in high single digits for Fabric Wash and Household Care to sustain. From the parent portfolio, the company launched Liquid I.V. and Hourglass. Accessibility of affordable formats improved, like Rin Liquid (Rs 99) and Bru Coffee (Rs 2). “For Q1 FY26, we expect 3–4% YoY volume growth versus 2% in Q4 FY25,” said Nuvama.
Nuvama on Dr Lal Pathlabs: Company to tap other regions as well
Nuvama analysts met with Dr Lal Pathlabs’ management, who were confident of double-digit growth to sustain in the Delhi-NCR region and competition intensity to remain steady. The brokerage has a Buy rating on the stock, with a target price of Rs 3,440, an upside of almost 23%.
Secondly, the company is high on an expansion mode across geographies, with 20% lab and 49% centre additions over FY24–27, according ot Nuvama. Plus, the management expects that the platform is ready for accelerated growth in West India and sees a huge untapped market in the rest of North India. Adding to that, the company’s management is “ready to squeeze local players with attractive prices and high-end offerings.” Dr Lal Pathlabs will focus on inorganic levers, mainly in South India.
Nuvama on IndiaMart: Upgraded to ‘Buy’ from ‘Reduce’
Nuvama upgraded IndiaMart to ‘Buy’ from ‘Reduce’. The brokerage house raised the target price to Rs 3,800 from Rs 2,100, which is an upside of a whopping 52% over the next 12 months. Nuvama believes the business is entering a new demand upcycle. Management’s initiatives, such as changes on the platform and investing in marketing and branding to attract buyers, will lead to higher unique business enquiries. This will be followed by a rise in net new subscriber additions.
The brokerage house increased earnings estimates by 9% for FY26 and 10% for FY27, each driven by higher revenue growth. However, Nuvama lowered profitability expectations. IndiaMart‘s management has made some changes to address structural problems, such as improving the platform, insourcing one part of the sales force, and now investing in branding and marketing.